I will do a seperate report on the other AGM issues today:
predictably Q 8 generated the most heat:
That the Company be and is hereby generally and unconditionally authorised for the purposes of section 166 of the Companies Act 1985 (the “Act”) to make market purchases (within the meaning of Section 163(3) of the Act) of Ordinary Shares of 5p each in the Company provided that:
a) the maximum number of ordinary shares which may be purchased is 100,000,000 (representing 32.52 per cent. of the Company’s issued ordinary share capital as at 31 July 2009);
b) the minimum price (exclusive of expenses) which may be paid for each Ordinary Share 5 pence;
c) the maximum price (exclusive of expenses) which may be paid for each Ordinary Share is an amount equal to 125 per cent. of the average of the middle market quotations of an Ordinary Share of the Company taken from the AIM appendix to the Stock Exchange Daily List for the five business days immediately preceding the day on which the share is contracted to be purchased;
d) this authority shall expire within 12 months from the date of passing this resolution (unless previously renewed, varied or revoked by the Company in general meeting); and
e) the Company may, before such expiry, enter into one or more contracts to purchase Ordinary Shares under which such purchases may be completed or executed wholly or partly after the expiry of this authority and may make a purchase of Ordinary Shares in pursuance of any such contract or contracts.
It was clarified by questions that:
a) all shares bought would be cancelled
b) shares would only be bought at a price which is below the cash value per share held by the company - currently 14.9p per share
c) there would be no tender offer - too complicated with potential tax issues - all shares will be bought in the market
d) there is no restriction on anyone - PIs, large institutions, directors - selling. The FD, Eugene Whyms (holds just over 3%) said that he was likely to sell some of his holding.
The effect should be that the buyback allows large holders to exit some or all of their positions without trashing the share price. With the shares being bought for cash value or less and then being cancelled, the amount of cash per share will…
