TIDMLDG
RNS Number : 4644Y
Logistics Development Group PLC
14 January 2022
14 January 2022
Logistics Development Group plc
(or "LDG" or the "Company")
Publication of Circular and Notice of General Meeting
LDG is pleased to announce that it has today published a
circular (the "Circular") containing details of the proposed
amendment of the Company's investing policy, a proposed
court-approved capital reduction, a proposed on-market purchase of
the Company's ordinary shares of GBP0.01 each in the capital of the
Company ("Ordinary Shares") and the related proposed approval of a
waiver under Rule 9 of the City Code on Takeovers and Mergers
(together the "Proposals"), and includes a notice of a general
meeting of the Company (the "General Meeting"). The General Meeting
will be held at 10:00 a.m. on 31 January 2022 at the offices of
DBAY UK Ltd at 5th Floor, 1 Albemarle Street, London W1S 4HA.
On 8 November 2021, the Company announced that it had to date
received a total net cash inflow of GBP127.5 million from the
disposal of its indirect interest in Greenwhitestar Acquisitions
Limited, the holding company of Eddie Stobart Limited, The Pallet
Network, iForce, Eddie Stobart Europe and The Logistics People
businesses, to Culina Group Limited (the "Disposal"). Following
completion of the Disposal, the Company, in conjunction with its
investment manager, DBAY Advisors Limited ("DBAY"), has reviewed
the investment opportunities currently available to the Company and
believes that there will be more attractive opportunities to create
shareholder value outside the parameters of the Company's existing
investing policy.
Following the Disposal, trading in the Ordinary Shares has been
at a significantly discounted level to the amount of available cash
per Ordinary Share, thus the Company is seeking shareholder
approval to acquire up to 20 per cent. of the Voting Share Capital
(the "Share Buyback"), to reduce the observed discount to net asset
value per Ordinary Share and provide an exit opportunity for
shareholders who do not wish to retain their investment in the
Company following the change of the Company's investing policy.
The Share Buyback is to be financed by the cancellation of the
entire creditable amount in the Company's share premium account,
which will also create flexibility to make future distributions of
profits in cash or in specie to shareholders and/or make future
purchases of its own Ordinary Shares.
The expected timetable of principal events and the Chairman's
statement from the Circular are set out below. Unless otherwise
indicated, all defined terms in this announcement shall have the
same meaning as described in the Circular.
For enquiries:
Logistics Development Group Via FTI Consulting
plc
FTI Consulting
Nick Hasell
Alex Le May
Cally Billimore +44 (0) 20 3727 1340
Strand Hanson Limited
(Financial and Nominated Adviser)
James Spinney
James Dance
Abigail Wennington +44 (0) 20 7409 3494
Investec Bank plc
(Broker)
Gary Clarence
Harry Hargreaves +44 (0) 20 7597 5970
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
The dates and times set out below are based on the Company's
current expectations and may be subject to change. Any change will
be notified via a Regulatory Information Service. References to
times are to London times, unless otherwise stated.
Publication of the Circular 14 January 2022
Latest time and date for receipt of Forms 10.00 a.m. on 27 January
of Proxy 2022
General Meeting 10.00 a.m. on 31 January
2022
Expected Court Hearing to confirm the 11 February 2022
Capital Reduction(1)
Expected registration of Court Order and 22 February 2022
effective date of the Capital Reduction*
Completion of the Share Buyback no later than close
of business on 1 August
2023
Notes
(*) The expected date for the Court Hearing and the Capital
Reduction becoming effective are based on provisional dates that
have been obtained for the required Court hearings of the Company's
application. The dates are subject to any directions of the Court
and the date for the registration of the Court Order is dependent
upon, amongst other things, the date on which the Court confirms
the proposed Capital Reduction.
LETTER FROM THE CHAIRMAN OF LOGISTICS DEVELOPMENT GROUP PLC
(Registered in England and Wales with registered number 08922456
)
Registered Office
3 More London Riverside
4(th) Floor
London SE1 2AQ
England
Directors
Adrian Collins (Independent Non-Executive Chairman)
David Facey (Independent Non-Executive Director)
Stephen Harley (Independent Non-Executive Director)
Peter Nixon (Non-Executive Director)
14 January 2022
Dear Shareholder
Proposed Revised Investing Policy
Proposed Capital Reduction by Cancellation of Share Premium
Account
Proposed General Authority for On-Market Share Purchases
Approval of Waiver of Rule 9 of the City Code on Takeovers and
Mergers
and
Notice of General Meeting
1. Introduction
On 1 July 2021, the Company announced the disposal of its
indirect interest in Greenwhitestar Acquisitions Limited (" GWSA
"), the holding company of Eddie Stobart Limited (" ESL "), The
Pallet Network, iForce, Eddie Stobart Europe and The Logistics
People businesses, to Culina Group Limited (the " Disposal "). As
announced on 8 November 2021, the Company has to date received a
total net cash inflow of GBP127.5 million from the Disposal. As at
the Latest Practicable Date, the Company had available cash of
approximately GBP131,783,173.37, held no material investment assets
and had no debt.
Following completion of the Disposal, the Company, in
conjunction with its investment manager, DBAY Advisors Limited ("
DBAY "), has reviewed the investment opportunities currently
available to the Company and believes that there will be more
attractive opportunities to create shareholder value outside the
parameters of the Company's existing investing policy.
In addition, following completion of the Disposal, trading in
the Company's Ordinary Shares has been at a level which represents
a significant discount to the amount of available cash per Ordinary
Share. Accordingly, the Company is seeking authority to acquire
Ordinary Shares in the market (the " Share Buyback "), which the
Board believes may serve to reduce the observed discount to NAV per
Ordinary Share and provide an exit opportunity for Shareholders who
do not wish to retain their investment in the Company following the
change of the Company's investing policy. Shareholders should note,
however, that there is no guarantee that the Share Buyback will
either eliminate or reduce the observed discount to NAV per
Ordinary Share.
To undertake the Share Buyback and to provide the Company the
flexibility to make future distributions of profits in cash or in
specie to Shareholders and/or complete future share buybacks, the
Company requires distributable reserves. Accordingly, the Board is
also seeking approval, subject to the consent of the Court, for the
Company's share premium account to be cancelled (the " Capital
Reduction ") and transferred to the Company's profit and loss
account to reduce accumulated losses and create distributable
reserves.
DBAY, which represents the Company's largest shareholder (with
certain of its managed funds (the " DBAY Shareholder Funds ")
holding approximately 26.98 per cent. of the Company's issued share
capital), and certain associates presumed to be acting in concert
with DBAY (together with DBAY, the " Concert Party ") together hold
in aggregate approximately 32.90 per cent. of the Company's issued
share capital. Given the Concert Party holds interests in Ordinary
Shares, in aggregate, between 30 and 50 per cent. of the Voting
Share Capital, any increase in the Concert Party's aggregate
percentage voting rights as a result of the Share Buyback would
require the Concert Party to make an offer for the Ordinary Shares
not owned by the Concert Party in accordance with Rule 9 of the
Takeover Code. Accordingly, the Company's ability to commence the
Share Buyback programme will be conditional on Independent
Shareholders passing the Whitewash Resolution approving a waiver of
the obligation for the Concert Party to make a general offer
pursuant to Rule 37 of the Takeover Code.
The purpose of this letter is to provide you with information on
the background to and reasons for the proposals set out herein, to
explain why the Board considers such proposals to be in the best
interests of the Company and the Shareholders as a whole and why
the Independent Directors unanimously recommend that you vote in
favour of the Resolutions to be proposed at the General
Meeting.
2. Proposed Change of Investing Policy
The Company is proposing to amend its investing policy, subject
to Shareholder approval, in order to, inter alia , broaden the
range of sectors in which it can invest and enable it to invest in
certain funds managed by DBAY (the " DBAY Investment Funds " ). The
proposed Revised Investing Policy is set out in full in Part IV
(Revised Investing Policy) of the Circular and is substantially the
same as the investing policy of the DBAY Investment Funds in which
the Company proposes to invest, other than the addition of the
ability of the Company to invest in the DBAY Investment Funds.
The key features of the proposed Revised Investing Policy
include:
-- Characteristics : investment primarily in undervalued
companies, with a focus on companies that generate or have the
potential to generate significant cash flows, where there is a high
degree of revenue visibility and have a strong and distinctive
market position;
-- Investment type : investment in equity and equity related
products, in both quoted and unquoted companies, and in the DBAY
Investment Funds;
-- Sectors : a broader range of sectors, including logistics,
distribution, technology services, security and manufacturing;
-- Geography : no geographical restriction but expected to
primarily be within the United Kingdom or the European Union;
-- Ownership : to range from a minority position to 100 per cent. non-operating ownership; and
-- Restrictions : a maximum of 50 per cent. of the Company's NAV
at the time the relevant investment is made, using the latest
available management accounts of the Company, can be invested in
the DBAY Investment Funds. Investments made outside of the DBAY
Investment Funds will be limited to 10 per cent. of NAV per
investment (on the same basis), unless approved by the Board.
In addition, DBAY has agreed that, subject to the implementation
of the Revised Investing Policy, it will fund the Company's
reasonable corporate costs going forward.
(a) Amendments to the Existing Investment Management Agreement
The adoption of the existing investment management agreement
between the Company and DBAY (the " Existing Investment Management
Agreement ") was approved by Shareholders on 29 December 2020. In
order to effect the Revised Investment Policy, several changes are
required to the Existing Investment Management Agreement,
including:
-- a provision ensuring that DBAY will not receive management or
performance fees twice in respect of funds committed to the DBAY
Investment Funds by the Company. It is noted that the fees
currently payable by the Company, being two per cent. in respect of
any amounts invested by the Company in any portfolio companies and
a 20 per cent. performance fee with an eight per cent. hurdle, will
become an annual fee no greater than two per cent. on any amounts
committed by the Company to the DBAY Investment Funds and a 20 per
cent. performance fee with an eight per cent. hurdle;
-- a commitment from DBAY to ensure that any DBAY Investment
Funds in which the Company invests will retain investment policies
that are substantially the same as the Revised Investing Policy;
and
-- a commitment from DBAY that it will provide the Company with
an amount which is equal to the Company's reasonable corporate
expenses in the given year, provided that such amount shall not
exceed the lower of: (i) GBP800,000; or (ii) the management fees in
respect of investments made and/or amounts committed by the Company
which are received by the Manager in the relevant year. DBAY will
also ensure that there is at all times a contingency amount of at
least GBP2 million on the Company's balance sheet to cover any
exceptional expenses that may arise.
The Board believes that the proposed Revised Investing Policy
and the associated amendment to the Existing Investment Management
Agreement are in the best interests of the Company and Shareholders
as a whole and would enable the Company to continue to meet its
investment objectives of providing Shareholders with attractive
total returns achieved through capital appreciation and, when
prudent, shareholder distributions and dividends in-line with the
Company's dividend policy.
(b) Related Party Transaction
Given DBAY's current interest via its managed funds is more than
10 per cent. of the Voting Share Capital, it is a substantial
shareholder, and therefore a related party (as defined in the AIM
Rules for Companies). Consequently, the proposed changes to the
Existing Investment Management Agreement are deemed to be a related
party transaction for the purposes of Rule 13 of the AIM Rules for
Companies. For the purposes of the AIM Rules for Companies, the
Independent Directors (being all Directors save for Peter Nixon),
having consulted with the Company's nominated adviser, Strand
Hanson, consider the terms of the proposed changes to the Existing
Investment Management Agreement to be fair and reasonable so far as
its Shareholders are concerned.
3. Share Buyback
Following completion of the Disposal, the Company has
significant cash balances and no debt or material investment
assets. Recent trading in the Company's Ordinary Shares has been at
a level which represents a significant discount to the amount of
cash per Ordinary Share, with the volume-weighted average price per
Ordinary Share from 1 July 2021 to the Latest Practicable Date
being 13.38 pence and the cash figure on the balance sheet as at
the Latest Practicable Date of approximately GBP131,783,173.37,
representing approximately 18.77 pence per Ordinary Share.
Accordingly, the Company is seeking authority to acquire up to
140,441,180 Ordinary Shares in the market, which the Board believes
may serve to reduce the observed discount to NAV per Ordinary Share
and provide an exit opportunity for Shareholders who do not wish to
retain their investment in the Company following the proposed
change to the Company's investing policy. Shareholders should note,
however, that there is no guarantee that the Share Buyback will
either eliminate or reduce the observed discount to NAV per
Ordinary Share.
In light of the foregoing, the Board wishes to seek Shareholder
approval for the Share Buyback, such approval being in respect of
up to 20 per cent. of the Voting Share Capital (the " Share Buyback
Authority "). Accordingly, Shareholders are being asked to approve
the Share Buyback Resolution.
Upon completion of the Share Buyback, the Company intends to
cancel the Ordinary Shares bought back by the Company pursuant to
the Share Buyback Authority. The Company will be under no
obligation to buy back the maximum number of Ordinary Shares that
the Share Buyback Authority allows and will consider the best
course of action for the Company in light of the prevailing share
price and investment opportunities at the relevant time. However,
if the maximum number of Ordinary Shares are bought back by the
Company pursuant to the Share Buyback Authority, the issued share
capital of the Company would comprise 561,764,720 Ordinary
Shares.
The Board reserves the right to decide how much of the Voting
Share Capital the Company will buy back under Share Buyback
Authority, and may decide to discontinue the Share Buyback entirely
in the event that the Board decides that it would not be in the
best interests of the Company and its Shareholders as a whole for
the Company to undertake or continue the Share Buyback, at the
relevant time.
(a) Summary information on the Share Buyback Authority
Shareholders are being asked to approve the Share Buyback
Resolution to enable the Company to make market purchases of up to
140,441,180 Ordinary Shares, representing a maximum of 20 per cent.
of the Voting Share Capital as at the Latest Practicable Date.
The Share Buyback Resolution is subject to and conditional upon
the passing of both the Whitewash Resolution to approve the Panel
Waiver (see paragraph 4 below, headed "The Takeover Code" for
further details) and the Capital Reduction Resolution to authorise
the Capital Reduction to finance the Share Buyback (see paragraph 5
below, headed "Capital Reduction" for further details).
The maximum price (exclusive of expenses) to be paid in relation
to any share purchase shall be five per cent. above the average
middle market quotations for an Ordinary Share (as derived from the
London Stock Exchange's Daily Official List) for the five business
days immediately preceding the date on which such Ordinary Share is
contracted to be purchased. The minimum price (exclusive of
expenses) to be paid in relation to any share purchase shall be its
nominal value.
Further details regarding the Share Buyback Resolution are set
out below in the paragraph 6 below headed "General Meeting".
4. The Takeover Code
As set out in paragraph 1 above , the Share Buyback gives rise
to certain considerations under the Takeover Code. The Takeover
Code is issued and administered by the Takeover Panel. The Takeover
Code applies to all takeover and merger transactions, however
effected, where the offeree company is, among other things, a
listed or unlisted public company resident in the United Kingdom,
the Channel Islands or the Isle of Man (and to certain categories
of private limited companies). The Company is a public company
resident in the United Kingdom and its Shareholders are therefore
entitled to the protections afforded by the Takeover Code.
(a) Information on the Concert Party
Each of the entities listed in the table below are together
considered to be acting in concert for the purposes of the Takeover
Code (together the " Concert Party "). As at the Latest Practicable
Date, members of the Concert Party have an interest in the Ordinary
Shares equating to an aggregate of 32.90 per cent. of the issued
share capital of the Company.
Name of ultimate beneficial Number of Ordinary Percentage of the
owner Shares held issued share capital
of the Company (%)
DBAY Fund II 27,025,969 3.85
------------------- ----------------------
DBAY Fund II Cayman 8,419,779 1.20
------------------- ----------------------
DBAY Fund III 153,996,143 21.93
------------------- ----------------------
Colin Kingsnorth 11,838,807 1.69
------------------- ----------------------
Alex Paiusco 9,722,790 1.38
------------------- ----------------------
David Morrison 5,000,000 0.71
------------------- ----------------------
Saki Riffner 4,532,339 0.65
------------------- ----------------------
William Stobart 3,889,844 0.55
------------------- ----------------------
Mike Branigan 2,745,072 0.39
------------------- ----------------------
Andrew Pegge 1,838,807 0.26
------------------- ----------------------
Mike Haxby 1,290,347 0.18
------------------- ----------------------
Peter Nixon 706,467 0.10
------------------- ----------------------
Total 231,006,364 32.90
------------------- ----------------------
Further information on the Concert Party is set out in Part II
(Additional Information) of the Circular.
(b) Application of the Takeover Code
Under Rule 9 of the Takeover Code, any person who acquires,
whether by a series of transactions over a period of time or not,
an interest in shares (as defined in the Takeover Code) which when
taken together with shares already held by him/her or held or
acquired by persons acting in concert with him/her, carry 30 per
cent. or more of the voting rights of a company which is subject to
the Takeover Code or is interested in 30 per cent. or more but does
not hold more than 50 per cent. of the shares carrying voting
rights of such a company and acquires an interest in any additional
shares carrying voting rights of that company, is normally required
to make a general cash offer to all the remaining shareholders of
the company to acquire their equity shares and transferable
securities carrying voting rights in the company. An offer under
Rule 9 of the Takeover Code must be in cash at the highest price
paid by the person or the group of persons acting in concert in the
preceding 12 months.
Accordingly, pursuant to Rule 9 of the Takeover Code, if the
Board were to effect the Share Buyback, resulting in an increase to
the percentage of the voting rights which the Concert Party
controls, the Concert Party may be required to make a general cash
offer to all other Shareholders of the Company to acquire their
Ordinary Shares, unless such obligation has been waived by the
Takeover Panel.
Rule 37 of the Takeover Code specifically refers to situations
where a company purchases its own voting shares, noting that any
resulting increase in the percentage of shares carrying voting
rights in which a person or group of persons acting in concert is
interested will be treated as an acquisition for the purposes of
Rule 9 of the Takeover Code, but that the Panel will normally waive
any such resulting obligation to make a general offer if there is a
vote of the independent shareholders.
(c) Panel Waiver
In order to enable the Company to effect the Share Buyback
without triggering a mandatory offer obligation for the Concert
Party, the Company has consulted with the Takeover Panel and the
Takeover Panel has agreed to waive the requirement for the Concert
Party to make a general offer to all Shareholders under Rule 9 of
the Takeover Code in circumstances where, following the Share
Buyback, the aggregate percentage holding of the Concert Party
increases (the " Panel Waiver "). This Panel Waiver is subject to
the approval by a vote of Independent Shareholders of the Company
on a poll at the General Meeting. The Whitewash Resolution seeks
this approval. The duration of the Panel Waiver is the same as the
duration of the Share Buyback Authority and will therefore expire
at the earlier of the conclusion of the annual general meeting of
the Company in 2023 or close of business on 1 August 2023.
Accordingly, should Independent Shareholders approve the Whitewash
Resolution, they will be waiving the requirement for the Concert
Party to make a mandatory general offer under Rule 9 of the
Takeover Code as a result of the exercise of the Share Buyback
Authority.
If the maximum number of Ordinary Shares are bought back by the
Company pursuant to the Share Buyback Authority and assuming the
Concert Party does not participate in the Share Buyback and no
further Ordinary Shares are issued by the Company, then the Concert
Party would, in aggregate, hold interests in Ordinary Shares
carrying a maximum of 41.12 per cent. of the Voting Share Capital,
as set out in the table below.
Name of ultimate beneficial Number of Ordinary Maximum Percentage
owner Shares held of the Voting Share
Capital of the Company*
(%)
DBAY Fund II 27,025,969 4.81
------------------- -------------------------
DBAY Fund II Cayman 8,419,779 1.50
------------------- -------------------------
DBAY Fund III 153,996,143 27.41
------------------- -------------------------
Colin Kingsnorth 11,838,807 2.11
------------------- -------------------------
Alex Paiusco 9,722,790 1.73
------------------- -------------------------
David Morrison 5,000,000 0.89
------------------- -------------------------
Saki Riffner 4,532,339 0.81
------------------- -------------------------
William Stobart 3,889,844 0.69
------------------- -------------------------
Mike Branigan 2,745,072 0.49
------------------- -------------------------
Andrew Pegge 1,838,807 0.33
------------------- -------------------------
Mike Haxby 1,290,347 0.23
------------------- -------------------------
Peter Nixon 706,467 0.13
------------------- -------------------------
Total 231,006,384 41.12
------------------- -------------------------
* Assuming 140,441,180 Ordinary Shares are acquired pursuant to
the Share Buyback Authority and the Concert Party does not
participate in the Share Buyback and no further Ordinary Shares are
issued by the Company.
Following exercise of the Share Buyback Authority in full, the
Concert Party would hold Ordinary Shares carrying over 30 per cent.
of the Voting Share Capital but would not hold Ordinary Shares
carrying more than 50 per cent. of the Voting Share Capital and, as
long as members of the Concert Party continue to be treated as
acting in concert, any further increase in the Concert Party's
aggregate interest in Ordinary Shares will be subject to Rule 9 of
the Takeover Code.
The Concert Party has no intention of making an offer for the
Company but, if it chooses to, it will not be restricted from
making an offer.
Accordingly, whilst the obligations under Rule 9 of the Takeover
Code would be waived in relation to any exercise of the Share
Buyback Authority, any other future share buybacks or purchases of
any interest in shares in the Company by the Concert Party after
the expiry of the Panel Waiver would remain subject to Rule 9 and
the other provisions of the Takeover Code.
The individual members of the Concert Party have each confirmed
to the Company that they are not proposing, following any increase
in their percentage interests in the Voting Share Capital as result
of the Share Buyback, and save for the Company's proposed amendment
of its investing policy, to seek any change in the general nature
of the Company's business. The Concert Party has further confirmed
that it has no intention to change the Company's plans with respect
to: (i) the composition of the Board, nor the Company's plans with
respect to the continued employment of employees and management of
the Company and its subsidiaries (including any material change in
conditions of employment) or any material change to the balance of
skills and functions of the employees and management; (ii) the
Company's future business and its strategic, research and
development plans; (iii) the location of the Company's headquarters
or headquarter functions or the location of the Company's place of
business; (iv) employer contributions into any of the Company's
pension schemes, the accrual of benefits for existing members, nor
the admission of new members; (v) redeployment of the Company's
fixed assets; or (vi) the continuation of the Ordinary Shares being
admitted to trading on AIM.
Your attention is drawn to Part II (Additional Information) of
the Circular which sets out certain further information and
financial information respectively that is required to be disclosed
in the Circular pursuant to the rules contained in the Takeover
Code.
Under Rule 25.2 of the Takeover Code, only the Independent
Directors are able to make a recommendation to the Independent
Shareholders with respect to the proposed Whitewash Resolution. The
Independent Directors believe it is in the best interests of the
Company that the Whitewash Resolution be passed and hereby
recommend that Independent Shareholders vote in favour of the
Whitewash Resolution. Strand Hanson, as the Company's independent
financial adviser, has provided formal advice to the Independent
Directors that it considers the terms of these proposals to be fair
and reasonable and in the best interests of Shareholders and the
Company as a whole. In providing this advice, Strand Hanson has
taken into account the Independent Directors' commercial
assessments. In accordance with the requirements of the Takeover
Code, members of the Concert Party are not permitted to vote on the
Whitewash Resolution in respect of their aggregate holding of
231,006,364 Ordinary Shares.
5. Capital Reduction
The Capital Reduction is being sought to create distributable
reserves that would enable the Company to finance the Share Buyback
described in paragraph 3 above and also give the Company the
flexibility to make future distributions of profits in cash or in
specie to Shareholders and/or make future purchases of its own
Ordinary Shares.
The Company currently has a balance on its share premium account
of GBP157,477,000 (rounded to the nearest GBP'000) which has arisen
as a result of various prior issues of shares by the Company at
prices in excess of their nominal value. Under the Companies Act
2006, the share premium account constitutes a non-distributable
reserve and the sums credited to this reserve are therefore not
distributable to Shareholders, either by way of dividends or share
buybacks. Consequently, the Board is recommending that the entire
amount standing to the credit of the share premium account of the
Company be cancelled (the " Capital Reduction ") and transferred to
the Company's profit and loss account to create distributable
reserves.
It is anticipated that the Capital Reduction would, after taking
into consideration the Company's current accumulated losses of
approximately GBP29,670,000, create distributable reserves to the
value of approximately GBP127,807,000 (assuming that there is no
change to the level of accumulated losses before the Capital
Reduction becomes effective).
The Capital Reduction is conditional upon the Company obtaining
the approval of Shareholders by special resolution at the General
Meeting and confirmation of the Capital Reduction by the Court.
(a) Shareholder approval
Shareholders' approval is being sought to carry out the Capital
Reduction pursuant to the Capital Reduction Resolution set out as
resolution 4 in the Notice of General Meeting. The Capital
Reduction Resolution will be proposed as a special resolution
requiring a majority of at least 75 per cent. of Shareholders
attending and voting in person or by proxy at the General Meeting
in order to be passed.
(b) Court approval
In addition to the approval of Shareholders, the proposed
Capital Reduction requires the confirmation 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 anticipation of this, a
provisional date of 22 February 2022 has been obtained for the
Court Hearing. This date is subject to change depending on the
Court's timetable.
Before it confirms the Capital Reduction, the Court may require
protection for the creditors (including contingent creditors) of
the Company whose debts remain outstanding on the relevant date,
except in the case of creditors which have consented to the
proposed Capital Reduction. Any such creditor protection may
include seeking the consent of the Company's creditors to the
proposed Capital Reduction and/or the Company giving an undertaking
to the Court to create a special non-distributable reserve, with
any such reserve to remain until the relevant creditors of the
Company (who are not protected at that date by any other means)
have been otherwise protected or the relevant liability
discharged.
The Board has undertaken a thorough and extensive review of the
Company's liabilities (including contingent liabilities) and
considers that the Company will be able to satisfy the Court that,
as at the date on which the proposed Capital Reduction becomes
effective, the Company's creditors will be sufficiently
protected.
It is anticipated that the Court Hearing to confirm the proposed
Capital Reduction will take place on 22 February 2022, and that the
proposed Capital Reduction would become effective on the following
day or shortly thereafter, following the necessary registration of,
amongst other things, the Court Order at Companies House. The Board
reserves the right to abandon or to discontinue (in whole or in
part) the application to the Court in the event that the Board
considers that the terms on which the proposed Capital Reduction
would be (or would be likely to be) confirmed by the Court would
not be in the best interests of the Company and/or the Shareholders
as a whole.
Following the implementation of the Capital Reduction, there
will be no change to the rights attaching to the Ordinary
Shares.
6. General Meeting
You will find at the end of the Circular a notice convening a
general meeting of the Company, to be held at 10.00 a.m. on 31
January 2022 at the offices of DBAY UK Ltd at 5th Floor, 1
Albemarle Street, London W1S 4HA to consider and, if thought
appropriate, pass the Resolutions summarised below.
(a) Resolution 1 (the Investing Policy Resolution)
The Investing Policy Resolution proposes to approve the proposed
amendments to the Investing Policy. The Investing Policy Resolution
will be proposed as an ordinary resolution and all Shareholders
will be entitled to vote on this resolution. Full details of the
Company's Existing Investing Policy and the proposed Revised
Investing Policy are set out in Part III (Existing Investing
Policy) and Part IV (Revised Investing Policy), respectively, of
the Circular.
(b) Resolution 2 (the Share Buyback Resolution)
The Share Buyback Resolution is conditional upon the passing of
the Whitewash Resolution and the Capital Reduction Resolution and
seeks to confer authority for the market purchase by the Company of
up to 140,441,180 Ordinary Shares. This number represents 20 per
cent. of the Voting Share Capital as of the Latest Practicable
Date.
The Share Buyback Resolution will be proposed as an ordinary
resolution and all Shareholders will be entitled to vote on this
resolution.
The Share Buyback Authority will expire at the earlier of the
conclusion of the annual general meeting of the Company in 2023 or
close of business on 1 August 2023, unless such authority is
otherwise revoked or varied by the Company prior to the date of
such expiry and save that the Company may (prior to such expiry)
enter into a contract to acquire Ordinary Shares which will or may
be completed or executed wholly or partially after such expiry and
may make an acquisition of Ordinary Shares pursuant to such
contract in reliance on the Share Buyback and the Panel Waiver.
Although the Share Buyback Authority will last until the earlier
of the conclusion of the annual general meeting of the Company in
2023 or close of business on 1 August 2023, the Company may ask
Shareholders to approve a new share buyback authority at the
Company's next annual general meeting or at some other later date.
However, since the Panel Waiver only relates to the Share Buyback
Authority, and also expires at the earlier of the conclusion of the
annual general meeting of the Company in 2023 or close of business
on 1 August 2023, the Company would be required to seek a new
waiver from the Takeover Panel in relation to any obligation which
would otherwise be imposed on any member of the Concert Party to
make a general offer to all Shareholders under Rule 9 of the
Takeover Code as a result of the exercise of any share buyback
authority subsequently obtained by the Company at a shareholder
meeting (such waiver again being conditional upon the approval of
Independent Shareholders voting on a poll).
(c) Resolution 3 (the Whitewash Resolution)
The Whitewash Resolution proposes to approve the waiver
conditionally granted by the Takeover Panel for the disapplication
of Rule 9 of the Takeover Code following the exercise by the
Company of the Share Buyback (whether exercised in whole or in
part). The Takeover Panel has confirmed that, subject to the
Whitewash Resolution being passed by the requisite majority of the
Independent Shareholders on a poll, no mandatory bid obligation on
the Concert Party under Rule 9 of the Takeover Code would be
triggered by virtue of the Share Buyback. The Whitewash Resolution
seeks the approval of the Panel Waiver by Shareholders.
The Whitewash Resolution will be proposed as an ordinary
resolution. In accordance with the requirements of the Takeover
Code, members of the Concert Party are not permitted to vote on the
Whitewash Resolution in respect of their aggregate holding of
231,006,364 Ordinary Shares, but may vote on the remainder of the
Resolutions.
(d) Resolution 4 ( the Capital Reduction Resolution)
The Capital Reduction Resolution proposes to approve, subject to
the consent of the Court, the cancellation of the entire amount
standing to the credit of the share premium account of the Company.
The Capital Reduction Resolution will be proposed as a special
resolution requiring a majority of at least 75 per cent. of those
Shareholders attending and voting in person or by proxy at the
General Meeting in order to be passed. All Shareholders will be
entitled to vote on the Capital Reduction Resolution.
7. Action to be taken
You have been provided with a Form of Proxy for use in
connection with the General Meeting. Whether or not you propose to
attend the General Meeting in person, you are requested to complete
and sign the Form of Proxy in accordance with the instructions
printed thereon and return it to the Company's registrars, Link
Group, at PXS 1, Central Square, 29 Wellington Street, Leeds, LS1
4DL as soon as possible but, in any event, so as to arrive no later
than 10.00 a.m. on 27 January 2022.
The completion and return of a Form of Proxy will not preclude
you from attending the General Meeting and voting in person if you
wish to do so.
8. Recommendation
(a) The Whitewash Resolution
The Independent Directors, being Adrian Collins, David Facey and
Stephen Harley, who have been so advised by Strand Hanson, consider
the proposals to be fair and reasonable and in the best interests
of the Independent Shareholders and the Company as a whole.
Accordingly, the Independent Directors unanimously recommend that
Independent Shareholders vote in favour of the Whitewash Resolution
to be proposed as Resolution 3 at the General Meeting.
Adrian Collins and Stephen Harley, the Independent Directors who
hold Ordinary Shares, intend to vote in favour of the Whitewash
Resolution in respect of the 2,020,000 Ordinary Shares held by
them, representing approximately 0.29 per cent. of Voting Share
Capital as at the Latest Practicable Date.
(b) Other Resolutions
The Directors consider the amendment to the Company's investing
policy, the Capital Reduction and the Share Buyback to be fair and
reasonable and in the best interests of the Company as a whole and
accordingly unanimously recommend that Shareholders vote in favour
of Resolutions 1, 2 and 4 at the General Meeting.
Stephen Harley, Adrian Collins and Peter Nixon, the Directors
who hold Ordinary Shares, intend to vote in favour of Resolutions
1, 2, and 4, in respect of the in aggregate 2,726,467 Ordinary
Shares held by them, representing approximately 0.39 per cent. of
Voting Share Capital as at the Latest Practicable Date.
The Company has received irrevocable commitments from Saki
Riffner, Alex Paiusco and DBAY Fund III to vote or procure votes in
favour of the Investing Policy Resolution, Share Buyback Resolution
and the Capital Reduction Resolution at the General Meeting, in
each case, in respect of their entire holding of Ordinary Shares.
These irrevocable commitments are in respect of, in aggregate,
168,251,272 Ordinary Shares, representing approximately 23.96 per
cent. of the Voting Share Capital as at the Latest Practicable
Date.
In conclusion, I am more than aware that your Company has gone
through a number of significant changes over the last two years.
Should the Proposals be adopted, the Company's investment manager,
DBAY, can concentrate on making your Company prosper over the years
to come.
DEFINITIONS
The following definitions apply, unless the context requires
otherwise:
"GBP" pounds sterling, the lawful
currency of the UK;
"AIM" the market of that name operated
by the London Stock Exchange;
"Board" the board of Directors of the
Company from time to time, or
a duly constituted committee
thereof;
"Business Day" any day (other than a Saturday
or Sunday) upon which commercial
banks are open for business
in London;
"Capital Reduction Resolution" the resolution numbered 4 set
out in the Notice of General
Meeting to approve the Capital
Reduction;
"Capital Reduction" the proposed cancellation of
the Company's share premium
account as described in the
Circular;
"Companies House" the registrar of companies in
England and Wales;
"Company" Logistics Development Group
plc, a public limited company
incorporated in England & Wales
with registered number 08922456;
"Concert Party" the DBAY Shareholder Funds and
those acting, or deemed to be
acting, in concert with it;
"Court Hearing" the final hearing by the Court
to confirm the proposed Capital
Reduction;
"Court Order" the order of the Court confirming
the proposed Capital Reduction;
"Court" the High Court of Justice in
England and Wales;
"DBAY" DBAY Advisors Limited, a company
incorporated in the Isle of
Man (company number 126150C)
whose registered office is at
3rd Floor, Exchange House, 54-62
Athol Street, Douglas, Isle
of Man IM1 1JD;
"DBAY Fund II Cayman" DouglasBay Capital II Cayman
Fund LP;
"DBAY Fund II" DouglasBay Capital II Fund LP;
"DBAY Fund III" DouglasBay Capital III Fund
LP;
"DBAY Funds" certain funds advised by DBAY
(including DBAY Fund II, DBAY
Fund II Cayman and DBAY Fund
III);
"DBAY Investment Funds" certain funds managed by DBAY
into which it is proposed that
the Company would invest pursuant
to the Revised Investing Policy;
"DBAY Shareholder Funds" DBAY Fund II, DBAY Fund II Cayman
and DBAY Fund III;
"Directors" the directors of the Company
as at the date of the Circular;
"Disposal" the disposal of the Company's
indirect interest in GWSA, the
holding company for ESL, The
Pallet Network, iForce, Eddie
Stobart Europe and The Logistics
People businesses, to Culina
Group Limited;
"ESL" Eddie Stobart Limited;
"Existing Investing Policy" the existing Investing Policy
approved by Shareholders at
the extraordinary general meeting
of the Company held on 29 December
2020;
"Existing Investment Management the existing investment management
Agreement" agreement between the Company
and DBAY which was approved
by Shareholders at the extraordinary
general meeting of the Company
held on 29 December 2020;
"Form of Proxy" the form of proxy accompanying
the Circular for use by Shareholders
in relation to the General Meeting;
"General Meeting" the general meeting of the Company,
convened for 31 January 2022
or any adjournment, therefore;
"GWSA" Greenwhitestar Acquisitions
Limited, a limited company incorporated
in England and Wales under company
number 08922540;
"Independent Directors" those directors of the Company
other than Peter Nixon or such
other director being an appointee
or associate of DBAY;
"Independent Shareholders" Shareholders excluding members
of the Concert Party;
"Investing Policy Resolution" the resolution numbered 1 set
out in the Notice of General
Meeting to approve the Revised
Investing Policy;
"Latest Practicable Date" the latest practicable date
prior to the publication of
the Circular, being 12 January
2022;
"London Stock Exchange" London Stock Exchange plc;
"Manager" DBAY, acting as manager of the
Company;
"NAV" net asset value;
"Notice of General Meeting" the notice of the General Meeting;
"Ordinary Shares" ordinary shares of GBP0.01 each
in the capital of the Company;
"Panel Waiver" the waiver granted by the Takeover
Panel, conditional on the approval
by Independent Shareholders
of the Panel Waiver Resolution,
of any obligation which would
otherwise be imposed on members
of the Concert Party, either
individually or collectively,
to make a general offer to all
Shareholders under Rule 9 of
the Takeover Code, as a result
of market purchases made pursuant
to the exercise of the Share
Buyback Authority;
"Resolutions" the resolutions 1 to 4 set out
in the Notice of General Meeting;
"Revised Investing Policy" the Investing Policy proposed
to be adopted by the Company;
"Share Buyback Authority" the general authority for the
Company to make on-market purchases
of up to 20 per cent. of its
Voting Share Capital implemented
by way of share buyback;
"Share Buyback Resolution" the resolution numbered 2 set
out in the Notice of General
Meeting to approve the Share
Buyback Authority;
"Shareholder(s)" holder(s) of Ordinary Shares;
"Strand Hanson" Strand Hanson Limited of 26
Mount Row, London, W1K 3SQ;
"Takeover Code" the City Code on Takeovers and
Mergers published by the Takeover
Panel (as amended from time
to time);
"Takeover Panel" the Panel on Takeovers and Mergers;
"UK" or "United Kingdom" the United Kingdom of Great
Britain and Northern Ireland;
"Voting Share Capital" or "Voting 702,205,900 Ordinary Shares,
Shares" comprising the entire issued
share capital of the Company;
and
"Whitewash Resolution" the resolution numbered 3 set
out in the Notice of General
Meeting to approve the Panel
Waiver.
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END
CIREZLBFLFLLBBK
(END) Dow Jones Newswires
January 14, 2022 02:00 ET (07:00 GMT)
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