PRESS RELEASE
For further information: Guy Thomas 01227 463214
Website: www.guythomas.org.uk
19 July 2002
ALEXANDERS SHAREHOLDERS OBJECT TO ORB DEAL
Takeover Panel responds to private shareholder whistleblowers
Complaints to the Takeover Panel by private shareholders in AIM-listed cash shell Alexanders Holdings plc have led to a postponement of the company’s AGM.
The proposed deal: a mugging for independent shareholders
Alexanders’ directors had proposed a deal whereby unquoted property company Orb Estates would get its hands on the major part of Alexanders’ £11m cash balance, and also acquire 75.1% control of Alexanders’ share capital.
Under this proposed deal, Alexanders’ shareholders would exchange a cash balance of approximately 25p per share for a minority shareholding in a highly geared property company with net tangible assets of only 19p per share. After a typical discount for quoted property shares, the shares would probably be worth considerably less than this.
Furthermore following the deal, Orb Estates would control over 75.1% of the company, a proportion which appears cynically chosen to facilitate a further mugging of the independent shareholders at some time in the future.
The deal therefore appears exceptionally poor value for independent shareholders, especially in comparison with the alternative of winding up the company and returning 25p per share of shareholders’ cash to shareholders.
Directors’ conflicts of interest
Charles Helvert, the chairman of Alexanders Holdings, is also finance director of Orb Estates, the unlisted company undertaking the reverse takeover. At Alexanders Mr Helvert is a part-time chairman, who holds no shares whatsoever in the company. This gives rise to suspicions as to for whose benefit the proposed deal is structured, Orb Estates or Alexanders?
Only one director of Alexanders, Roger Humm, holds any shares in the company. Mr Humm has recommended the proposed deal to shareholders. In the light of this, it seems remarkable that he has arranged to sell all of his own shares on completion of the deal, at an undisclosed price, to an undisclosed party. His actions speak louder than his recommendation to shareholders.
"A sophisticated scam"
Guy Thomas, one of the independent shareholders, said: "This proposed deal amounts to a sophisticated scam. The major part of Alexanders’ cash balance would be tranferred to Orb Estates, a company of which Mr Helvert is finance director, in exchange for negligible benefits to Alexanders’ existing shareholders. Independent shareholders in Alexanders want either a fair deal, or our cash returned to shareholders."
Guy Thomas 01227 463214
Website: http://www.guythomas.org.uk/Alexanders.htm
NOTES FOR EDITORS
Independent shareholders suspect that these companies are acting in concert with Orb Estates. In particular, Craigen originally nominated Mr Helvert (the finance director of Orb Estates) as chairman of Alexanders; and Sunneynook’s acquisition of Alexanders’ shares was facilitated by a payment guarantee from Lynch Talbot Limited. The latter company is, predictably, based offshore , and it appears to be the controlling party for Orb Estates.
Following a recent acquisition of shares by Sunneynook, Craigen and Sunneynook between them now hold 56% of the share capital of Alexanders. Rule 9 of the Code on Takeovers and Mergers requires that where parties acting in concert increase their holdings in a company above 29.99%, a general offer to shareholders for the whole company should be made, at the highest price paid by the concert party in the previous 12 months. In this case, the most recent acquisition was by Sunneynook on 27 June 2002, under a put option with a price of 30p per share.