Press releases 2006
RETURN OF CAPITAL – RESULTS OF COURT MEETING AND EXTRAORDINARY GENERAL MEETING
19 April 2006
Results of Court Meeting and EGM
London Stock Exchange plc (the “Exchange”) announces that, at the Court Meeting and the Extraordinary General Meeting held earlier today, shareholders of the Exchange approved the resolutions relating to the proposed return of approximately £510 million to shareholders by way of a Scheme of Arrangement (the “Return”).
The expected timetable for the Return is as previously announced. Subject to the Court sanctioning the Scheme at a hearing expected to take place on 12 May 2006, dealings in the New Ordinary Shares and B Shares of London Stock Exchange Group plc (“Exchange Group”) are expected to commence on 15 May 2006.
Share conversion ratio
Details of the Return were set out in the circular sent to shareholders on 21 March 2006 (the “Scheme Circular”). As a result of the Return, shareholders at the Scheme Record Time, expected to be 5.00pm on 12 May 2006 were due to receive one B Share in Exchange Group with a value of 200 pence for every Existing Ordinary Share that they held and 3 New Ordinary Shares in Exchange Group for every 4 Existing Ordinary Shares that they held. The ratio used for the share conversion was set by reference to the Closing Price of 863.5 pence per Existing Ordinary Share on 6 March 2006, the date prior to the announcement of the details of the Return.
The intention behind issuing a smaller number of New Ordinary Shares for Existing Ordinary Shares is that the price of a New Ordinary Share should be approximately equal to the price of an Existing Ordinary Share, thus facilitating comparisons of the Exchange’s share price, earnings per share and dividend per share before and after the Return.
The Scheme Circular noted that the share conversion ratio may, in effect, be re-set if the current proposed ratio would no longer result in appropriate comparability before and after the Return. In the light of the strong performance in the Exchange’s share price since the proposals were announced on 7 March 2006, the Board, which has received financial advice from JPMorgan Cazenove Limited, has decided that it would be in the best interests of the Exchange and its shareholders to improve comparability before and after the Return. Steps have therefore been taken to set a new share conversion ratio by reference to the closing price of Existing Ordinary Shares on their last day of dealings (expected to be 12 May 2006). A change in the share conversion ratio will not, subject to changes for fractional entitlements, affect the proportionate interest, both before and after the Scheme Effective Date, of any shareholder in the ordinary share capital of Exchange Group and should not, of itself, have any effect on the market value of any shareholders’ investment in Exchange Group.
As a result, shareholders at the Scheme Record Time, expected to be 5.00pm on 12 May 2006 will receive:
- one B Share with a value of 200 pence for every Existing Ordinary Share that they hold; and
- an appropriate number of New Ordinary Shares for the Existing Ordinary Shares that they hold to achieve the desired comparability to be fixed by reference to the share price of the Existing Ordinary Shares at that time.
For example, if the closing share price of Existing Ordinary Shares on the last day of dealings in the Existing Ordinary Shares were to be 1259.5 pence (the closing price on 18 April 2006), then the share conversion ratio would be set at 53 New Ordinary Shares for every 63 Existing Ordinary Shares, together with one B Share for every Existing Ordinary Share.
The announcement of the new share conversion ratio will be made after the market close on 12 May 2006 through the Regulatory News Service.
Further details are provided in the notes below.
London Stock Exchange
John Wallace – Media +44 (0)20 7797 1222
Paul Froud – Investor Relations +44 (0)20 7797 3322
James Murgatroyd +44 (0)20 7073 6232
Simon Moyse +44 (0)20 7251 3801
Christopher Smith +44 (0)20 7155 4704
Richard Locke +44 (0)20 7155 4706
JPMorgan Cazenove Limited, which is regulated in the United Kingdom by the Financial Services Authority, is acting exclusively as financial adviser and broker for Exchange and Exchange Group and for no one else in connection with the Return and will not be responsible to any person other than Exchange and Exchange Group for providing the protections afforded to its customers or for giving advice in relation to the Return or the matters contemplated by this announcement.
Copies of the special resolution passed at the Extraordinary General Meeting of the Exchange are available for inspection by the public at the UK Listing Authority’s Document Viewing Facility which is situated at: Financial Services Authority, 25 The North Colonnade, Canary Wharf, London E14 5HS (tel. + 44 (0)20 7676 1000) during normal business hours on any weekday (except public holidays).
1. The formula by which the new share conversion ratio will be determined is represented by the closing price of Existing Ordinary Shares on last day of dealing of the Existing Ordinary Shares (expected to be 12 May 2006) less the amount of the capital return (200 pence per Existing Ordinary Share) divided by the closing share price of the Existing Ordinary Shares on the last day of dealing.
2. The new share conversion ratio will be set as a fraction of two numbers of no more than two digits each which is closest to the result of the formula and is intended to minimise the theoretical difference in share price between the closing price of an Existing Ordinary Share and the price of a New Ordinary Share, taking into account the return of 200 pence per Existing Ordinary Share.
3. Subject to the Court sanctioning the scheme of arrangement at a hearing expected to take place on 12 May 2006, the New Ordinary Shares and B shares will be issued to shareholders pursuant to the Scheme as set out in the Scheme Circular and approved without modification at the Court Meeting. The Scheme is unaffected by the new share conversion ratio. Immediately following the issue of New Ordinary Shares in accordance with the Scheme, a consolidation and sub-division of the New Ordinary Shares will be effected pursuant to a resolution passed by the current shareholders of Exchange Group on 13 April 2006. The consolidation and sub-division of the New Ordinary Shares will be effected so that it will have substantially the same effect as if the ratio in the Scheme were adjusted to the new share conversion ratio.
4. The nominal value of a New Ordinary Share following the reduction of capital of Exchange Group for the purposes of the Return will be determined by dividing 5 5/6 pence (the current nominal value of an Existing Ordinary Share) by the new share conversion ratio.
5. The number of New Ordinary Shares in issue on the first day of dealing of New Ordinary Shares will be the number of Existing Ordinary Shares in issue on their last day of dealing multiplied by the new share conversion ratio.