RNS Number:7825N
iimia MitonOptimal plc
12 February 2008
Not for release, publication or distribution, in whole or in part, in, into or
from the United States, Canada, Australia, Republic of South Africa or Japan
12 February 2008
iimia MITONOPTIMAL plc
Proposals
for
Acquisition of Midas Capital Partners Limited,
Placing of Ordinary Shares,
Change of Name to Midas Capital plc
and
Admission of the Enlarged Share Capital to Trading on AIM
The Board of iMO, the AIM-traded company encompassing fund management, wealth
management and corporate finance, is pleased to announce that the Company has
conditionally agreed to merge with Midas Capital Partners Limited.
Highlights
* Midas is a fast growing fund management company based in
Liverpool. It was formed in 2002 and had grown its FuM to over �1.6 billion as
at 31 January 2008.
Midas' principal distribution channels are fund and life company platforms, with
a large number of IFAs choosing to access Midas' funds for their clients through
these means. The strength of these distribution channels is demonstrated by the
fact that Midas has seen net inflows into its open-ended funds in each month of
the last four calendar years.
Midas has an excellent long-term investment performance record. Its open-ended
funds were both ranked in the top decile of their sectors over the period since
launch to 31 January 2008 (appendix 1, note 1). The team's pension fund
performance record puts them in the top quartile over three years, the top
percentile over five years and the top decile over 10 years (appendix 1, note
2).
Midas has 18 employees, including its investment and business development teams
each comprising six individuals. Midas' directors, staff and families have a
significant ownership interest, collectively holding approximately 53.1 per
cent. of Midas' issued share capital.
* The merger will be effected by iMO acquiring the entire issued
share capital of Midas in exchange for the issue of 27,500,129 new Ordinary
Shares, representing approximately 48.0 per cent. of the Enlarged Share Capital,
and the payment of approximately �59.0 million in cash to Midas Shareholders.
The Acquisition values Midas at approximately �100.3 million (appendix 1, note
3).
* The Cash Consideration will be funded through a combination of
a placing of 7,000,000 new Ordinary Shares at 150p per share to raise �10.5
million (before expenses), new �40 million term loan facilities with the Bank of
Scotland and iMO's existing cash resources.
* The Directors believe that the benefits of the Merger include:
- creating a pre-eminent player in the multi-asset fund manager
market with:
- approximately �2.9 billion of FuM&A (appendix 1, note 4);
- one of the most experienced investment teams operating in this
area within the UK; and
- an excellent long-term investment record across its product
range;
- further strengthening of the iMO Group's investment expertise,
with the addition of a highly rated investment team, and extending its
distribution capabilities, through Midas' strong distribution channels;
- increasing the proportion of the iMO Group's revenues that are
recurring, whilst spreading the iMO Group's central costs over a broader
business base; and
- significant merger synergies, currently estimated to be at least
�2.5 million per annum (pre-tax) once the Existing Group and Midas have been
fully integrated.
* The Directors expect the Acquisition to enhance the Company's
underlying EPS once the Existing Group and Midas have been fully integrated
(appendix 1, note 5).
* Whilst turbulent stockmarket conditions will present challenges
for all asset management businesses, the Directors believe that the multi-asset
approach to seeking investment returns should continue to attract a high
proportion of inflows into the Enlarged Group's funds in difficult markets.
The Acquisition and the proposed change of name of the Company to Midas Capital
plc are conditional on, among others, the approval of Existing Shareholders at a
general meeting of the Company which has been convened for 10.00 a.m. on
Thursday, 6 March 2008. Shareholders representing 55.4 per cent. of the
Existing Ordinary Shares have irrevocably undertaken or indicated their intent
to vote in favour of the resolutions to be proposed at the General Meeting.
An electronic copy of the Company's AIM admission document dated 12 February
2008 will be available from the Company's website: www.imoplc.co.uk shortly.
Michael Phillips, chief executive of iimia MitonOptimal plc, said:
"We are excited about the future following the merger with Midas Capital
Partners, one of the fastest growing fund management businesses in the UK. The
merged group will be a leading multi-asset fund management company with one of
the best-resourced and most experienced investment teams operating in the UK.
With excellent long term performance across the product range, we believe the
merger positions us to take advantage of the growing demand for reduced risk and
multi-asset investment products."
Simon Edwards, chief executive of Midas Capital Partners, said:
"We are delighted with the progress we have made since inception in 2002 which
has been based on a simple business model and strong investment returns since
launch. The merger with iimia MitonOptimal represents a new chapter in our
history and provides an infrastructure which will enable a very strong
investment team to focus on achieving good investment performance for clients.
Our confidence in the investment products of the merged group is demonstrated by
the Midas management team's commitment to reinvest a substantial proportion of
the cash received, at least �20m, into these products.
With the depth and experience of talent within the merged group, we view the
future with optimism and I look forward to working with Mike Phillips and his
colleagues to build on the success which each business has achieved to date."
Enquiries
Michael Phillips, iimia MitonOptimal plc Tel: 07738 181 520
Simon Edwards, Midas Capital Partners Limited Tel: 07947 118 670
Sue Inglis, Intelli Corporate Finance Limited Tel: 020 7653 6300
James Steel, Arbuthnot Securities Limited Tel: 020 7012 2000
Roland Cross, Broadgate Tel: 020 7726 6111
Notes
Intelli, which is authorised and regulated by the FSA, is acting solely for the
Company and no one else in connection with the Proposals and will not be
responsible to anyone other than the Company for providing the regulatory and
legal protections afforded to customers (as defined by the FSA Rules) of Intelli
or for providing advice in relation to the contents of this document or any
matter, transaction or arrangement referred to in it.
Arbuthnot, which is authorised and regulated by the FSA, is acting as nominated
adviser and broker to the Company and no one else in connection with Admission
and will not be responsible to any person other than the Company for providing
the regulatory and legal protections afforded to customers (as defined by the
FSA Rules) of Arbuthnot or for providing advice in relation to the contents of
this document or any matter, transaction or arrangement referred to in it.
Not for release, publication or distribution, in whole or in part, in, into or
from the United States, Canada, Australia, Republic of South Africa or Japan
12 February 2008
iimia MITONOPTIMAL plc
Proposals
for
Acquisition of Midas Capital Partners Limited,
Placing of Ordinary Shares,
Change of Name to Midas Capital plc
and
Admission of the Enlarged Share Capital to Trading on AIM
Introduction
The Board announces that iMO is proposing to merge with Midas Capital Partners
Limited, a fast growing fund management company based in Liverpool with FuM of
over �1.6 billion as at 31 January 2008. The merger will be effected by iMO
acquiring the entire issued share capital of Midas in exchange for the issue of
27,500,129 new Ordinary Shares, representing approximately 48.0 per cent. of the
Enlarged Share Capital, and the payment of approximately �59.0 million in cash
to Midas Shareholders. The Acquisition values Midas at approximately �100.3
million (appendix 1, note 3).
The Directors and the Proposed Directors believe that the benefits of the Merger
include:
* creating a leading multi-asset fund management business with
approximately �2.9 billion of FuM&A (appendix 1, note 4);
* further strengthening of the iMO Group's investment expertise,
with the addition of a highly rated investment team, and extending its
distribution capabilities, through Midas' strong distribution channels;
* increasing the proportion of the iMO Group's revenues that are
recurring, whilst spreading the iMO Group's central costs over a broader
business base; and
* significant merger synergies, currently estimated to be at
least �2.5 million per annum (pre-tax) once the Existing Group and Midas have
been fully integrated.
The Directors and the Proposed Directors expect the Acquisition to enhance the
Company's underlying earnings per share once the Existing Group and Midas have
been fully integrated (appendix 1, note 5).
In order to provide part of the funding for the Cash Consideration, iMO is
proposing to raise �10.5 million (before expenses) through the placing of
7,000,000 new Ordinary Shares at 150p per share with institutional and other
investors. The balance of the Cash Consideration will be funded out of iMO's
existing cash resources and new facilities with the Bank of Scotland.
Owing to the size and relative value of Midas in relation to the Company, the
Acquisition constitutes a reverse takeover under the AIM Rules for Companies and
therefore requires the approval of Existing Shareholders at a general meeting of
the Company which has been convened for 10.00 a.m. on Thursday, 6 March 2008.
A resolution will also be proposed at that meeting to change the Company's name
to Midas Capital plc. Shareholders representing 55.4 per cent. of the Existing
Ordinary Shares have irrevocably undertaken or indicated their intent to vote in
favour of the resolutions to be proposed at the General Meeting.
If the Acquisition is approved, the trading of the Existing Ordinary Shares on
AIM will be cancelled and the Company will apply for re-admission of the
Existing Ordinary Shares and admission of the New Ordinary Shares to trading on
AIM.
Information on Midas
Introduction
Midas is a fast growing fund management company based in Liverpool. It was
formed in early 2002 by Simon Edwards and Alan Borrows, who were responsible for
managing the �3 billion Merseyside Pension Fund from 1995 to 2002.
Midas has a specialist multi-asset approach, focusing on attractive long-term
returns through a highly diversified asset mix. It manages two open-ended
funds, together accounting for some 77.1 per cent. of Midas' FuM at 31 January
2008, and one investment trust, in addition to a small number of segregated
mandates for pension funds, charitable funds, trusts and high net worth
individuals.
More than 2,000 IFA firms have invested in Midas' funds and this number
continues to grow. Midas has also established links with major fund platforms,
providing investors with direct access to its funds, and relationships with a
number of life offices, enabling Midas' funds to be accessed via life and
pension products. Fund platforms and life company platforms are now Midas'
principal distribution channels, with a large number of IFAs choosing to access
Midas' funds for their clients through these means. The strength of these
distribution channels is demonstrated by the fact that Midas has seen net
inflows into its open-ended funds in each month of the last four calendar years.
The following table shows the aggregate net inflows into Midas' open-ended
funds over that period.
Calendar Year Aggregate Net Inflows
2004 �38m
2005 �128m
2006 �292m
2007 �824m
As at 31 January 2008, Midas had FuM of over �1.6 billion.
Midas has 18 employees, including its investment team of six individuals and
business development team of six individuals. Midas' directors, staff and
families have a significant ownership interest, collectively holding
approximately 53.1 per cent. of Midas' issued share capital.
Investment Performance
Midas has an excellent long-term investment performance record.
The open-ended funds were both ranked in the top decile of their sectors over
the period since launch to 31 January 2008 (appendix 1, note 1).
The team's pension fund performance record, combining their periods managing the
Merseyside Pension Fund and managing a pension fund portfolio at Midas, compared
with all UK pension funds measured by the WM Company for the period to 31
December 2007, puts the team in the top quartile over three years, the top
percentile over five years and the top decile over 10 years (appendix 1, note
2).
Financial Information
The following table summarises the recent historical revenues and profits of
Midas.
Year to 31 March 6 Months to
30 September
UK GAAP2 IFRS1,2 IFRS1,2 IFRS1,3 IFRS1,3
2005 2006 2007 2006 2007
�m �m �m �m �m
Average FuM&A during period4 n/a n/a 753.4 628.1 1,334.6
Net sales 1.4 2.2 4.9 2.1 4.6
Growth - 55.2% 118.9% - 118.1%
Profit before tax 0.5 1.2 3.5 1.5 3.6
Margin 34.7% 55.0% 70.7% 69.9% 79.3%
Growth - 146.0% 181.5% - 147.4%
Net sales of investment services as % - - 0.6% 0.7% 0.7%
average FuM (p.a.)
Direct costs of investment services as - - (0.2%) (0.2%) (0.2%)
% average FuM (p.a.)
Notes:
1 As iMO is required to adopt IFRS as its primary basis of accounting
for the year ended 31 December 2007, Midas has restated its financial
information for the two years ended 31 March 2007 and has prepared its interim
results for the six months ended 30 September 2007 (and its comparative interim
results for the six months ended 30 September 2006) under IFRS.
2 This information (excluding the ratios) has been reported on by
Midas' auditors.
3 This information is unaudited.
4 This is the arithmetic average of Midas' FuM at the end of each
month in the period. Prior to the year ended 31 March 2007, Midas' FuM were not
recorded on a monthly basis and, therefore, the average FuM on a monthly basis
is not available.
As at 30 September 2007, Midas had shareholders' funds of �1.6 million
(unaudited).
Principal Terms of the Acquisition
The Company has entered, or will enter, into the Acquisition Agreements with the
Midas Shareholders to acquire the entire issued share capital of Midas. The
Midas Warrantors have entered into the principal Acquisition Agreement.
Although the Acquisition Agreements with certain individual Midas Shareholders
will not be entered into until Completion, each of those shareholders has
irrevocably appointed an attorney to enter into the relevant agreement on their
behalf.
Under the terms of the principal Acquisition Agreement, the Company has
conditionally agreed to pay a consideration of approximately �100.3 million
(appendix 1, note 3) to be satisfied, on Completion, by the allotment and issue
of 27,500,129 new Ordinary Shares to the Vendors and the payment of
approximately �59.0 million in cash to the Vendors. The Consideration Shares
will rank pari passu in all respects with the Existing Ordinary Shares and the
Placing Shares, including the right to receive all dividends and other
distributions declared, paid or made on the Ordinary Shares after Admission but
will not rank for the interim dividend of 2.0p per Ordinary Share announced this
morning and payable on Thursday, 20 March 2008.
All Midas Shareholders have given, or will give, warranties in relation to
capacity, authority and title to the shares being sold by them. In addition,
the Midas Warrantors have given general, commercial and tax warranties and tax
indemnities regarding Midas.
The Acquisition is conditional upon, among other things, receiving the requisite
clearances from the FSA, the resolutions required to give effect to the
Acquisition and the Placing being passed at the General Meeting and Admission.
Subject to certain exceptions, the Midas Shareholders have undertaken not to
dispose of their interests in Consideration Shares for a period of 12 months
following Completion and thereafter not to dispose of more than 25 per cent. of
such interests for a further 12 months (further details are set out under the
heading ''Lock-ins'' later in this announcement) and Midas' management and staff
have agreed to reinvest, in aggregate, at least �20 million of the Cash
Consideration that they receive in the Enlarged Group's investment funds for a
minimum of 12 months following Completion and 50 per cent. of the amount
originally reinvested for a minimum of 24 months.
iMO's Financing Arrangements, Including the Placing
In order to finance part of the Cash Consideration, iMO proposes to raise �10.5
million before expenses (�7.7 million net of expenses and transaction costs
related to the Proposals (appendix 1, note 6)) by way of a placing of 7,000,000
Ordinary Shares at 150p per share. The Placing Shares will rank pari passu in
all respects with the Existing Ordinary Shares and the Consideration Shares,
including the right to receive all dividends and other distributions declared,
paid or made on the Ordinary Shares after Admission but will not rank for the
interim dividend of 2.0p per Ordinary Share announced this morning and payable
on Thursday, 20 March 2008. The Placing is conditional upon, among other
things, the resolutions required to give effect to the Acquisition and the
Placing being passed at the General Meeting, the Acquisition Agreements having
become unconditional and Admission.
The balance of the Cash Consideration will be funded out of iMO's existing cash
resources and new �40 million term loan facilities with the Bank of Scotland.
Benefits of the Merger
The Directors and the Proposed Directors believe that iMO and Midas are
complementary businesses and that their merger will create a pre-eminent player
in the multi-asset fund manager market with approximately �2.9 billion of FuM&A
(appendix 1, note 4). The Enlarged Group will have strength and depth in its
investment and business development teams. In addition, Midas' strong
distribution channels should provide enhanced distribution opportunities for the
Existing Group's funds.
The Merger will increase the proportion of the iMO Group's revenues that are
recurring and spread the iMO Group's central costs over a broader business base.
In addition, the Directors and the Proposed Directors expect merger synergies
of at least �2.5 million per annum (pre-tax) once the Existing Group and Midas
have been fully integrated.
The Directors and the Proposed Directors expect the Merger to enhance the
Company's underlying earnings per share once the Existing Group and Midas have
been fully integrated (appendix 1, note 5).
The Enlarged Group
Name
iMO will continue as the parent company of the Enlarged Group and it is proposed
that its name will be changed at the General Meeting to Midas Capital plc.
Operational Structure
The Enlarged Group will continue to operate through three divisions: fund
management (operating under the ''Midas'' and ''Miton'' brands), wealth
management (operating under the ''iimia'' brand) and corporate services
(operating under the ''Intelli'' brand).
Board
A number of changes will be made to the Board with effect from Completion.
William Long will step down as non-executive chairman, but continue as a
non-executive director, of the Company and Colin Rutherford will be appointed as
non-executive chairman in his place. Bruce McIntosh and Martin Gray will stand
down as directors of the Company but will continue as employees of the Enlarged
Group. Simon Edwards will be appointed as managing director, with overall
responsibility for the fund management division. Lord Wade of Chorlton will
join the Board as non-executive deputy chairman and Adrian Collins will be
appointed to the Board as a non-executive director.
The Board intends to appoint a group finance director as soon as practicable
following Completion. Pending that appointment, Gordon Neilly has agreed to
assume responsibility at the Board level for overseeing the operation of the
Enlarged Group's finance function.
Details of members of the Board following Completion are set out below.
Colin Rutherford - Non-executive Chairman (48)
Colin was chairman, chief executive officer and a founder of Rutherford Manson
Dowds, a Scottish firm of chartered accountants which was sold (excluding the
business that became Intelli) to Deloitte in 1999. Following that sale, he
remained as executive chairman of Intelli until September 2005. He has been or
is chairman and director of a number of public and private companies including
Eurosales Finance PLC, SGI (formerly Circus Capital) Fund, Renaissance Services
SAOG, Argent Energy plc and Imagine Homes Limited. He is a chartered accountant
and alumnus of Heriot Watt University and Harvard Business School.
Lord Wade of Chorlton - Non-executive Deputy Chairman (75)
Lord Wade became chairman of Midas in 2002. Following his appointment to the
House of Lords in 1990, he sold most of his farming and cheese making interests,
the focus of his early career. He is chairman of Midas, Nimtech and Rising
Stars Growth Fund Limited and a consultant to Enterprise Ventures Limited and is
involved in a number of North West initiatives covering wealth creation,
innovation and technology. He is an adviser to Davies Wallis Foyster and King
Sturge & Co. He is also currently chairman, non-executive director or adviser
to a number of other commercial organisations.
Michael Phillips - Chief Executive (45)
Michael is a fellow of the Securities Institute and is chief executive of the
iMO Group. He co-founded Christows in 1991, and in a period of nine years built
Christows into a group with FuM&A of over �500 million on behalf of
approximately 3,000 clients. He was responsible for the day-to-day operations
of Christows until January 2001 when, following the acquisition of Christows by
The Evolution Group plc, he left and went on to form the original business of
the iMO Group. He joined the Board in 2004 at the iMO Group's inception, having
been chief executive of the predecessor iimia Group since its foundation in
2001.
Simon Edwards - Managing Director (44)
Simon was chief investment manager of the Merseyside Pension Fund from 1995
until 2002. Over this time he built up the team and was closely involved in the
selection of specialist third party funds, property and venture capital
investment as well as overall equity market investment. He left the Merseyside
Pension Fund to set up Midas. Between 1992 and 1995 he was a director at Credit
Suisse First Boston, based in London.
Gordon Neilly - Chairman, Intelli Corporate Finance (47)
Gordon qualified as a chartered accountant with Thompson McLintock & Co. Gordon
was business development director of Ivory & Sime plc (1993-1997) with
responsibility for developing its investment trust business, and formerly its
finance director (1990-1993). He joined RMD Corporate Finance's (now Intelli's)
listed advisory business in 1997 and has extensive corporate finance experience,
particularly in the closed-end fund and asset management sectors. He joined the
Board in September 2005.
Scott Campbell - Executive Director, International Fund Management (39)
Scott commenced his career with AMP Group in 1989. He then joined Appleton in
1996 and was appointed managing director of Appleton International in 1997.
Scott moved the location of the operation to London in 2000 and successfully
continued the development of the business as chief executive officer whilst also
acting as chief investment officer. He resigned from Appleton in April 2002 to
set up his own institutional offshore fund management company, which resulted in
the creation of Optimal Fund Management in July 2002. Scott has achieved a five
star ranking and awards from Standard & Poor's for the management of a variety
of offshore funds. Optimal Fund Management merged with Miton Investments in
2005. Scott joined the Board in October 2007 following the completion of the
merger of iMO and MitonOptimal.
Adrian Collins - Non-executive Director (53)
Adrian has worked in the fund management business for over 30 years, a large
part of which was at Gartmore Investment Management Limited where, latterly, he
was managing director. He is a consultant to Strand Partners Limited, a
corporate finance business based in the West End of London. He is chairman of
Corvus Capital plc and is also on the boards of City Natural Resources High
Yield Trust plc, Deutsche Land plc, New City High Yield Trust plc and a number
of other companies.
Nicholas Hamilton - Non-executive Director (58)
Nicholas, a fellow of the Securities Institute, qualified as a chartered
accountant with Deloitte where he remained until 1984, latterly in the roles of
group manager of both corporate finance and marketing. He spent six years at
Schroder Securities as head of corporate finance. In 1991 he joined Carr Kitcat
& Aitken in the same role. He became a non-executive director of the listed
Claremont Garments plc, a leading ladieswear supplier to Marks & Spencer, in the
same year and, in 1994, he became executive group finance director. In 1998 he
launched his own consultancy business as part of which he has been a director of
a number of public and private companies. He joined the Board in July 2005 as
an independent non-executive director.
William Long - Non-executive Director (64)
William joined the Board as chairman in 2004 at the iMO Group's inception,
having chaired the predecessor iimia Group since its foundation in 2001. He is
a fellow of the Securities Institute with over 30 years' experience of the
securities industry. He became a member of the Stock Exchange in 1972 and a
partner in Laing & Cruickshank. In 1981 he joined the Exeter partnership of
Milton Mortimer & Co, which was acquired by National Investment Group (NIG) in
1986, of which he became business development director. William subsequently
managed the Southern division of Capel-Cure Myers Capital Management Ltd and
became private client director of CCM after its acquisition by Old Mutual,
responsible for turnover of over �55 million.
Ownership Structure of the Enlarged Group and Implications under the Takeover
Code
On Admission, the Vendors will hold, in total, Ordinary Shares representing
around 50 per cent. of the Enlarged Share Capital. The largest single Vendor
with Ordinary Shares representing approximately 16.7 per cent. of the Enlarged
Share Capital will be Simon Edwards, currently chief executive of Midas and
proposed managing director of the Enlarged Group. In total, approximately 44.6
per cent. of the Enlarged Share Capital will be held by the Directors, Proposed
Directors and staff of the Enlarged Group.
The Takeover Panel has accepted the view of the Company and its nominated
adviser, Arbuthnot, that the Vendors should not be deemed to be acting in
concert (as defined in the Takeover Code) and that, accordingly, on Admission no
person, together with persons acting in concert with him, will be interested in
Ordinary Shares carrying 30 per cent. or more of the voting rights exercisable
at a general meeting of the Company for the purposes of Rule 9 of the Takeover
Code. The Company will remain subject to the Takeover Code.
Prospects for the Enlarged Group
Based on figures for unit trust/OEIC sales released by the IMA, the unit trust/
OEIC market experienced a net outflow from retail investors in November 2007,
the first time that redemptions have exceeded sales, and this trend continued in
December 2007. The credit crisis and higher volatility in equity markets have
reduced the risk appetite of retail investors which has been reflected in strong
net sales of cautious managed funds (November 2007: +�150.4 million; December
2007: +�129.8 million), balanced managed funds (November 2007: +�37.0 million;
December 2007: +�57.4 million), money market funds and guaranteed protected
funds (Source: IMA Monthly Statistics (Sector Summary)). In contrast, most
equity sectors were firmly out of favour during November and December 2007.
Notwithstanding the more volatile market conditions, both the Existing Group and
Midas saw net inflows into their funds in November 2007, December 2007 and
January 2008.
The Directors and Proposed Directors believe that the Enlarged Group will be
well positioned to take advantage of the growing demand for reduced risk and
multi-asset investment products, with one of the most experienced investment
teams operating in this area within the UK, combined with an excellent long-term
investment record across its product range, as shown in the following table.
Performance of the Enlarged Group's UK Open-ended Funds (to 31 January 20081)
Last 5 Years Since Launch
Fund Launched Peer Group1 Return Quartile Return Quartile
(%) Ranking (%) Ranking
CF iimia
Accelerated Apr-03 AM - - 112.5 1st
Growth Jan-05 AM - - 31.7 3rd
Growth & Income Jan-05 BM - - 35.8 1st
Income Fund Jan-05 CM - - 32.1 1st2
CF Midas
Balanced Growth Apr-02 BM 116.6 1st2 66.0 1st2
Balanced Income Apr-02 CM 83.9 1st 53.4 1st2
CF Miton
Arcturus Fund Nov-06 CM - - 3.8 1st
Cautious Income Portfolio Mar-01 CM 57.7 2nd 30.2 3rd
Global Portfolio Mar-01 AM 103.5 2nd 62.7 1st2
Strategic Portfolio Dec-96 BM 60.1 4th 96.2 1st
Special Situations Portfolio Dec-97 BM 128.4 1st2 211.9 1st2
Notes:
1 AM: IMA Active Managed; BM: IMA Balanced Managed; CM: IMA Cautious
Managed.
2 Decile ranking.
3 For source, please see appendix 1, note 1.
The Directors and Proposed Directors believe that the agreement of Midas'
management, staff and families to re-invest, in aggregate, at least �20 million
of the Cash Consideration in the Enlarged Group's investment funds on the basis
described under the heading ''Principal Terms of the Acquisition'' above
demonstrates their confidence in the Enlarged Group's future investment
performance.
Whilst turbulent stockmarket conditions will present challenges for all asset
management businesses, the Directors and Proposed Directors believe that the
multi-asset approach to seeking investment returns should continue to attract a
high proportion of inflows into the Enlarged Group's funds in difficult markets.
The Directors and Proposed Directors expect the wealth management division,
which is already benefiting from the acquisition of John K Miln, to make further
progress in the current year.
Difficult stockmarket conditions will undoubtedly present challenges for
Intelli's business but the Directors and Proposed Directors are encouraged by
the strong pipeline and diversity of activity and clients with which Intelli has
commenced the current year.
In view of the prospects for the individual divisions and the expected benefits
of the Merger referred to earlier in this letter, the Directors and Proposed
Directors view the Enlarged Group's long-term prospects with confidence.
Lock-ins
Immediately following Admission, the Vendors will be interested in, in
aggregate, approximately 27.5 million Consideration Shares, representing
approximately 48.0 per cent. of the Enlarged Share Capital. The Vendors will
undertake to the Company and Arbuthnot, subject to certain exceptions (including
the ability to accept a takeover offer for the Company and to give an
irrevocable undertaking to accept a takeover offer for the Company), not to
dispose of or transfer any Consideration Shares for a period of 12 months from
Admission and, thereafter, not to dispose of or transfer more than 25 per cent.
of the Consideration Shares in which they are interested prior to the second
anniversary of Admission.
Dividend Policy
The Directors have declared an interim dividend of 2.0p per Ordinary Share in
respect of the year ended 31 December 2007, which will be payable on Thursday,
20 March 2008 to Shareholders on the register of members at the close of
business on Friday, 22 February 2008, having an ex-dividend date of Wednesday,
20 February 2008. This dividend will not be payable in respect of the
Consideration Shares or the Placing Shares. This will be the first dividend
paid by the Company. The Board intends to adopt a progressive dividend policy
which will reflect the long-term earnings and cashflow potential of the Company,
whilst maintaining an appropriate level of dividend cover. It is envisaged that
the Company will pay a final dividend in May of each year, commencing in 2009.
Admission to AIM and Dealings
Application will be made to the London Stock Exchange for Existing Ordinary
Shares to be re-admitted and the New Ordinary Shares to be admitted to trading
on AIM. Admission is expected to become effective, and dealings in the Enlarged
Share Capital are expected to commence, at 8.00 a.m. on Friday, 7 March 2008.
General Meeting
Due to the size and relative value of Midas in relation to the Company, the
Acquisition constitutes a reverse takeover under the AIM Rules for Companies and
therefore requires the approval of Existing Shareholders at a general meeting of
the Company which has been convened for 10.00 a.m. on Thursday, 6 March 2008.
Resolutions will also be proposed at that meeting to give the Directors the
required powers and authorities to issue and allot the New Ordinary Shares, to
change the Company's name to Midas Capital plc and to adopt new articles of
association of the Company to bring the Articles into line with recent changes
in company law and current practice.
Shareholders representing 55.4 per cent. of the Existing Ordinary Shares have
irrevocably undertaken or indicated their intent to vote in favour of the
resolutions to be proposed at the General Meeting.
Availability of AIM Admission Document
Copies of the Company's AIM admission document, which will be published and
posted to Existing Shareholders later today, will be available free of charge
from:
(i) the Company's registered office;
(ii) the offices of Arbuthnot Securities Limited, Arbuthnot House, 20
Ropemaker Street, London EC2Y 9AR; and
(iii) the offices of Taylor Wessing LLP, Carmelite, 50 Victoria Embankment,
Blackfriars, London EC4Y ODX;
during normal business hours on any weekday (Saturdays, Sundays and public
holidays excepted) from today until one month after the date of this
announcement.
An electronic copy of the AIM admission document will also be available from the
Company's website: www.imoplc.co.uk shortly.
Expected Timetable
2008
Interim dividend of 2.0p per Existing Ordinary Share declared Tuesday, 12 February 2008
Publication of AIM admission document and posting to Shareholders Tuesday, 12 February
Ex-dividend date for interim dividend of 2.0p per Existing Ordinary Wednesday, 20 February 2008
Share
Record date for interim dividend of 2.0p per Existing Ordinary Share Friday, 22 February 2008
General meeting of iMO 10.00 a.m. on Thursday, 6 March
Admission of the Enlarged Share Capital effective 8.00 a.m. on Friday, 7 March
Acquisition completed Friday, 7 March
CREST accounts credited with the Placing Shares issued in Friday, 7 March
uncertificated form
Despatch of definitive share certificates for the Placing Shares by Friday, 14 March
issued in certificated form
Interim dividend of 2.0p per Existing Ordinary Share paid Thursday, 20 March 2008
Admission Statistics
Number of Existing Ordinary Shares 22,824,041
Number of Consideration Shares to be issued to Midas Shareholders 27,500,129
Placing Price 150p
Number of Placing Shares to be issued 7,000,000
Number of Ordinary Shares in issue immediately following Admission 57,324,170
Gross proceeds of the Placing �10.5m
Estimated net proceeds of the Placing (appendix 1, note 6) �7.7m
Market capitalisation on Admission (at the Placing Price) �86.0m
Ordinary Share RIC code
Current IMO
On Admission MDS
Ordinary Share ISIN number GB00B01WR582
Ordinary Share SEDOL number B01WR58
Appendix 1 - NOTES
1. The performance of open-ended funds referred to in this announcement
has been sourced from Financial Express, with the return on investment
calculated on the basis of UK sterling, NAV-NAV, net income reinvested.
2. With the exception of the period between April 2002 and September 2002,
the Midas team's performance record has been calculated using the WM Spectrum
Performance Measurement system and is based solely on data provided by Mersey
Pension Fund and the mutual clients of both the World Markets Company plc (''
WM'') and Midas. The data used for the period between April 2002 and September
2002 is based on calculated returns extracted from the WM All Funds Universe of
fund data. Due to the requirement for the insertion of a model portfolio for
the period between April 2002 and September 2002, the data used to calculate the
performance record does not constitute an official WM Company Track Record and
is not recognised as National Association of Pension Funds or Global Investment
Performance Standards compliant.
3. Valuing the Consideration Shares at the Placing Price, the Acquisition
values Midas at approximately �100.3 million.
4. The value of the Enlarged Group's FuM&A is based on the aggregate value
of the Existing Group's and Midas' FuM&A as at 31 January 2008.
5. The impact of the Acquisition on the Company's underlying EPS once the
Existing Group and Midas have been fully integrated has been calculated based on
the adjusted EPS from continuing operations, including other operating income
but before exceptional items, share based payments, amortisation and any
performance fees, on a diluted basis. Statements in this announcement regarding
the impact of the Acquisition on the Company's underlying EPS once the Existing
Group and Midas have been fully integrated should not be interpreted to mean
that the Company's underlying EPS will necessarily be greater than that for the
year ended 31 December 2007.
6. iMO's expenses in connection with the Acquisition referred to in this
announcement exclude the fee (but not VAT) payable to Intelli as its financial
adviser as such fee will be eliminated in iMO's consolidated accounts.
7. Details of the letters of appointment and service contracts of the
Proposed Directors are set out in the AIM admission document which is being
published today.
Appendix 2 - DEFINITIONS
"Acquisition" or "Merger" the proposed acquisition by iMO of the entire issued share
capital of Midas from the Midas Shareholders pursuant to the
Acquisition Agreements
"Acquisition Agreements" the principal sale and purchase agreement dated 12 February
2008 between iMO and the Midas Warrantors and the individual
sale and purchase agreements to be entered into between iMO
and each of the other Midas Shareholders pursuant to which iMO
has conditionally agreed to acquire the entire issued share
capital of Midas
"Admission" re-admission of the Existing Ordinary Shares and admission of
the New Ordinary Shares to trading on AIM becoming effective
in accordance with the AIM Rules for Companies
"AIM" the AIM market operated by the London Stock Exchange
"AIM Rules for Companies" the rules for AIM companies as issued by the London Stock
Exchange from time to time
"Arbuthnot" Arbuthnot Securities Limited
"Bank of Scotland" Bank of Scotland PLC
"Board" the board of directors of the Company from time to time
"Cash Consideration" the cash consideration payable by iMO to the Vendors pursuant
to the terms of the Acquisition Agreements
"Company" or "iMO" iimia MitonOptimal plc, a company incorporated and registered
in England and Wales with registered number 5160210
"Completion" completion of the Acquisition in accordance with the terms of
the Acquisition Agreements
"Consideration Shares" the 27,500,129 new Ordinary Shares to be issued to the Vendors
pursuant to the terms of the Acquisition Agreements
"Directors" the directors of the Company as at the date of this
announcement
"Enlarged Group" the Company and its subsidiary undertakings, including,
following Completion, Midas or any one or more of them as the
context may require
"Enlarged Share Capital" the issued share capital of iMO as it will be immediately
following Admission, comprising the Existing Ordinary Shares
and the New Ordinary Shares
"EPS" earnings per share
"Existing Group" the Company and its subsidiary undertakings as at the date of
the AIM admission document or any one or more of them as the
context may require
"Existing Ordinary Shares" the 22,824,041 Ordinary Shares in issue at the date of the AIM
admission document
"Existing Shareholders" holders of Existing Ordinary Shares
"FSA" the Financial Services Authority
"FuM" funds under management
"FuM&A" funds under management and advice
"GAAP" Generally Accepted Accounting Principles
"General Meeting" the general meeting of iMO convened for 10.00 a.m. on
Thursday, 6 March 2008, or any adjournment thereof
"IFAs" independent financial advisers
"IMA" Investment Management Association
"iMO Group" the Company and its subsidiary undertakings from time to time
"Intelli" Intelli Corporate Finance Limited, a subsidiary of the Company
"London Stock Exchange" London Stock Exchange plc
"Midas" Midas Capital Partners Limited, a company incorporated and
registered in England and Wales with registered number 4325961
"Midas Shareholders" or "Vendors" the holders of the entire issued share capital of Midas
"Midas Warrantors" the directors and senior management of Midas, being Lord Wade
of Chorlton, Alan Borrows, Michael Carr, Adrian Collins, Simon
Edwards, Alec Foster and David Thomas
"NAV" net asset value
"New Ordinary Shares" the Consideration Shares and the Placing Shares
"Ordinary Shares" ordinary shares of 10p each in the share capital of iMO
"Placing" the conditional placing of the Placing Shares by Arbuthnot, as
agent on behalf of the Company, pursuant to the Placing
Agreement
"Placing Price" 150p, being the price at which each Placing Share is to be
issued under the Placing
"Placing Shares" the 7,000,000 new Ordinary Shares proposed to be issued by iMO
pursuant to the Placing
"Proposals" the Acquisition, the Placing, Admission, the proposed change
of name of the Company, the proposed adoption of new articles
of association of the Company and related matters, all as
described in this announcement
"Proposed Directors" the persons who are to be appointed directors of iMO on
Completion, being Colin Rutherford, Lord Wade of Chorlton,
Simon Edwards and Adrian Collins
"Shareholders" holders of Ordinary Shares
"Takeover Code" the City Code on Takeovers and Mergers
"Takeover Panel" the Panel on Takeovers and Mergers
This information is provided by RNS
The company news service from the London Stock Exchange
END
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