Source: https://corporate.dunelm.com/investors/regulatory-news/rns-announcement/rm294nw
Timestamp: 2019-03-20 23:42:03
Document Index: 775177924

Matched Legal Cases: ['art 10', 'art 10', 'art 12', 'art 12', 'art 5', 'art 6', 'art 3', 'art 7', 'art 13', 'art 10', 'art 10', 'art 10', 'art 1', 'art 12']

Return of Capital Announcement (MSC) | Dunelm Group plc
RNS Number : 7071O
POSTING OF CIRCULAR RELATING TO PROPOSED RETURN OF CAPITAL INCLUDING NOTICE OF ANNUAL GENERAL MEETING ON 16 NOVEMBER 2012 AND NOTICE OF GENERAL MEETING ON 16 NOVEMBER 2012
Dunelm announces today the posting of a circular (the "Circular") to Shareholders containing details of the return of capital of 32.5 pence per Ordinary Share by way of a B/C share scheme, which was announced at the time of the Company's preliminary results on 13 September 2012. The total value of the return of capital will equate to approximately £65.8 million. The Circular includes notice of a General Meeting to approve the resolution necessary to implement the proposed return of capital, which will be held on 16 November 2012.
The Circular also includes notice of the Company's Annual General Meeting. The Company's annual report and financial statements for the year ended 30 June 2012 ("Annual Report and Financial Statements") is also being sent to Shareholders with the Circular.
The Annual General Meeting is to be held at The Holiday Inn Express, Rockingham Road, Kettering NN14 1UD at 9.30 am on 16 November 2012 and the General Meeting is to be held at The Holiday Inn Express, Rockingham Road, Kettering NN14 1UD at 10.00 am on 16 November 2012 (or as soon thereafter as the Annual General Meeting shall have concluded or been adjourned).
A copy of the Circular and the Annual Report and Financial Statements will shortly be available on the Company's website at: www.dunelm-mill.com. A copy of the Circular and the Annual Report and Financial Statements has been submitted to the National Storage Mechanism and will shortly be available for inspection at: www.Hemscott.com/nsm.do.
ANNUAL GENERAL MEETING AND RETURN OF CAPITAL - EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Latest time and date for receipt of white Form of Proxy for Annual General Meeting
9.30 am 14 November 2012
Latest time and date for receipt of yellow Form of Proxy for General Meeting
10.00 am 14 November 2012
9.30 am 16 November 2012
10.00 am 16 November 2012 (or as soon thereafter as the Annual General Meeting shall have concluded or been adjourned)
4.30 pm 16 November 2012
6.00 pm 16 November 2012
Dispatch of cheques or mandated bank accounts credited (as appropriate) in respect of the B Share Dividend and the proceeds under the Capital Option
Ordinary dividend record date
Dispatch of cheques or mandated bank accounts credited (as appropriate) in respect of the ordinary dividend
Proposed Return of Capital to Shareholders of 32.5 pence per Ordinary Share
The Board is proposing to return approximately £65.8 million of capital to Shareholders (equivalent to 32.5 pence per Ordinary Share). This is in addition to an ordinary dividend of 10.0 pence per Ordinary Share for the period ended 30 June 2012 which equates to £20.2 million. The background to and reasons for the Return of Capital are detailed in paragraph 2 below.
The precise aggregate amount of the Return of Capital will depend on the number of Ordinary Shares in issue at 6.00 pm on 16 November 2012. However, based on the number of Ordinary Shares in issue on 12 October 2012, the Return of Capital would amount to approximately £65.8 million in total.
The Return of Capital requires the approval of Shareholders which will be sought at the General Meeting to be held on 16 November 2012. Notice of the General Meeting will be sent to Shareholders with the Circular.
Notice of the Annual General Meeting will also be sent to Shareholders with the Circular.
If the Return of Capital is approved at the General Meeting, Shareholders on the register at the close of business on 16 November 2012 will receive payment of 32.5 pence per Ordinary Share by 30 November 2012.
If the ordinary dividend is approved at the Annual General Meeting, Shareholders on the register at the close of business on 30 November 2012 will receive payment of 10.0 pence per Ordinary Share by 21 December 2012.
Dunelm has consistently generated significant cashflow and has built up a material cash balance in recent years. In 2010, Dunelm returned £42.2 million of surplus cash to its shareholders and Dunelm has continued to generate further cash balances. In the financial year ended 30 June 2012, the Group's average net cash position was £57.6 million, with net cleared funds at the end of the period being £65.2 million. In the absence of the proposed Return of Capital the Board would expect the Group's positive cash position to continue to increase further.
Given the above, the expected cash requirements of the Group going forward and the other funding available to the Group, the Board has decided that Dunelm should return approximately £65.8 million to Shareholders. The Board believes that as a result, the Group will have a more appropriate capital structure whilst still being in a position to invest in and grow the Group in line with the current stated strategy, being to (i) further develop Dunelm's specialist position; (ii) open more superstores; (iii) grow its multi-channel business; and (iv) develop and exploit the Group's strengthened infrastructure.
The Board is mindful of the fact that it has a range of institutional, corporate and individual shareholders and, as such, proposes a flexible mechanism by which the capital is returned. Having considered the available options, the Board is proposing that the Return of Capital is effected via a B/C share scheme under which Shareholders will receive a bonus issue of a newly created class of shares, either B Shares or C Shares, pro-rata to their holding of Ordinary Shares.
This method of return has been chosen as it allows Shareholders (save for certain Overseas Shareholders) to be treated equally irrespective of the size of their investment in Dunelm and gives each Shareholder flexibility to elect to receive all or part of the Return of Capital in a dividend form, if preferred. Whichever alternative is chosen, the Return of Capital will amount to 32.5 pence per Ordinary Share and, based upon the number of Ordinary Shares in issue, total approximately £65.8 million.
At the closing middle-market price of 661.0 pence per Ordinary Share on 12 October 2012 (being the latest practicable date prior to the publication of the Circular), the proposed Return of Capital to Shareholders represents approximately 4.92 per cent. of Dunelm's market capitalisation at that date and 32.5 pence per Ordinary Share.
The alternatives are summarised below and explained in further detail in the Circular.
Shareholders (other than Overseas Shareholders in Restricted Territories) may elect to receive any one of, or a combination of, the two Share Alternatives set out below. The Capital Option is not available to Overseas Shareholders in Restricted Territories who are only entitled to elect for the Income Option.
If a Shareholder does not properly complete and return an Election Form or if they are a CREST holder and do not send a valid TTE Instruction, unless the Company determines otherwise, they will be deemed to have elected for the Income Option in respect of all of their entitlement.
Shareholders who choose this alternative (or are deemed to have chosen this alternative), will receive one B Share for each corresponding Ordinary Share held at the Ordinary Share Record Date. Shareholders will receive a single dividend of 32.5 pence per B Share in respect of those B Shares. A Shareholder's aggregate entitlement will be rounded down to the nearest penny. It is expected that this will be declared by 19 November 2012. Following the declaration of the B Share Dividend, the B Shares will be automatically converted into Deferred Shares. The Deferred Shares will not be listed, and will carry extremely limited rights as Shareholders will have already received a cash pay-out in relation to those shares. It is intended that the Deferred Shares will be purchased by UBS under the Articles of Association and subsequently purchased from UBS by the Company, in each case for an aggregate sum of 1 penny, and cancelled.
It is also expected that Shareholders who choose (or are deemed to have chosen) this alternative will have their cheques dispatched or mandated bank accounts credited (as appropriate) by 30 November 2012.
Shareholders who choose this alternative will receive one C Share for each corresponding Ordinary Share held at the Ordinary Share Record Date. It is intended that such C Shares will be purchased by UBS as principal under the Purchase Offer by 20 November 2012 for 32.5 pence per C Share, free and clear from all dealing expenses and commissions, with the proceeds of such sale being sent to relevant Shareholders by 30 November 2012 and it is intended that any such C Shares purchased by UBS would in turn be purchased from UBS by the Company and then cancelled.
The making of the Purchase Offer is subject to certain conditions and Shareholders' attention is drawn to paragraph 7 of Part 10 of the Circular, where the Purchase Offer Deed is summarised.
It is also expected that Shareholders who choose this alternative will have their cheques dispatched or CREST accounts credited (as appropriate) by 30 November 2012.
Shareholders' approval is being sought for the proposed Return of Capital.
A General Meeting has been convened for 10.00 am on 16 November 2012 (or as soon thereafter as the Annual General Meeting convened for 9.30 am that day shall have concluded), notice of which together with a yellow Form of Proxy to be used in connection with the General Meeting, will be sent out with the Circular.
The Return of Capital is conditional upon the Resolution being passed. The Resolution is a special resolution and will be passed if at least 75 per cent. of the votes are cast in favour.
(i) capitalise a sum not exceeding £2,025.93 standing to the credit of the Company's share premium account to pay up in full the B Shares and C Shares; and
(ii) allot and issue B Shares and C Shares up to an aggregate nominal amount of £2,025.93 to Shareholders on the basis of one B Share or one C Share for each Ordinary Share held at 6.00 pm on 16 November 2012. The authority granted to the Directors will expire on the earlier of the conclusion of the next annual general meeting of the Company after the passing of this Resolution and 31 December 2013; and
· approve the terms of the Option Agreement to be entered into between the Company and UBS Limited described in paragraph 7 of Part 10 of the Circular; and
· adopt new articles of association that incorporate the terms of the B Shares and C Shares and the Deferred Shares and to amend the power to make bonus issues to permit the issue of the B and C Shares in accordance with the B/C Share Scheme.
If the Resolution is not passed at the General Meeting, the Return of Capital will not proceed.
The Return of Capital is not conditional on the passing of any of the Resolutions being proposed at the Annual General Meeting.
A tax liability may arise for Shareholders resident in the UK (for tax purposes) in respect of the capital and/or income received under the Return of Capital depending upon a Shareholder's individual circumstances. A guide to the general tax position of United Kingdom Shareholders is set out in the Circular.
The Board does not consider that any adjustments to the terms of the Share Option Schemes are necessary to preserve the value of the options that have been granted under the Share Option Schemes following the Return of Capital. Should the Board subsequently determine that adjustments are so required, any adjustment proposed by the Board to the Group Share Option Plan and the Group Savings Related Share Option Plan will be subject to the consent of HM Revenue & Customs and any material adjustments will be subject to Shareholders' approval.
10. Preliminary Announcement and Significant Change
For information purposes, Shareholders' attention is drawn to the preliminary announcement of the results of the Company for the period to 30 June 2012 which was published on 13 September 2012 and which can be found at www.dunelm-mill.com.
The Directors are not aware of any significant change in the financial or trading position of the Group since 3 October 2012, being the date on which its last interim management statement was published. This interim management statement can be found at www.dunelm-mill.com.
The Annual General Meeting has been convened for 9.30 am on 16 November 2012, notice of which together with a white Form of Proxy to be used in connection with the Annual General Meeting, will be sent out with the Circular. A summary of each of the Resolutions to be proposed at the Annual General Meeting is set out in the Circular.
A yellow Form of Proxy for use at the General Meeting will be sent to Shareholders with the Circular. Whether or not Shareholders intend to be present at the General Meeting, they are requested to complete, sign and return the yellow Form of Proxy to Equiniti Limited, Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA, as soon as possible but in any event so as to be received no later than 10.00 am on 14 November 2012.
Shareholders who hold their Ordinary Shares in CREST may appoint a proxy by completing and transmitting a CREST Proxy Instruction to Equiniti so that it is received no later than 10.00 am on 14 November 2012.
The appointment of a proxy will not prevent a Shareholder from attending the General Meeting and voting in person if he wishes to do so.
A white Form of Proxy for use at the Annual General Meeting will be sent to Shareholders with the Circular. Whether or not Shareholders intend to be present at the Annual General Meeting, they are requested to complete, sign and return the white Form of Proxy to Equiniti Limited, Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA, as soon as possible but in any event so as to be received no later than 9.30 am on 14 November 2012.
Shareholders who hold their Ordinary Shares in CREST may appoint a proxy by completing and transmitting a CREST Proxy Instruction to Equiniti so that it is received no later than 9.30 am on 14 November 2012.
The appointment of a proxy will not prevent a Shareholder from attending the Annual General Meeting and voting in person if he wishes to do so.
The Circular contains instructions on the completion of the Election Form sent to Shareholders with the Circular if their Ordinary Shares are in certificated form, or if their Ordinary Shares are in uncertificated form (that is in CREST), how to make their election through CREST. The Election Form must be received or the TTE Instruction must be sent through CREST as soon as possible but in any event so as to be received no later than 4.30 pm on Friday 16 November 2012.
(i) Return of Capital
In the opinion of the Board, the Return of Capital and the Resolution to be proposed at the General Meeting are in the best interests of Shareholders as a whole.
Accordingly the Board unanimously recommends that Shareholders vote in favour of the Resolution to be proposed at the General Meeting as the Directors intend to do in respect of their own beneficial holdings amounting to 62,682,148 Ordinary Shares in aggregate, representing approximately 30.99 per cent. of the current voting share capital of Dunelm.
In the opinion of the Board, each of the Resolutions to be proposed at the Annual General Meeting are in the best interests of the Company and Shareholders as a whole, save that W L Adderley makes no recommendation with regard to the Waiver Resolution as, in accordance with the provisions of the Takeover Code, W L Adderley is considered to be interested in the outcome of the Waiver Resolution.
Accordingly, the Board, excluding W L Adderley for the purposes of the Waiver Resolution, recommends that Shareholders vote in favour of the Resolutions at the Annual General Meeting, as the Directors intend to do in respect of their own beneficial holdings of Ordinary Shares, which amount to 30.99 per cent. of the issued Ordinary Shares, save that W L Adderley will not vote in respect of his holdings of Ordinary Shares, which amount to 30.51 per cent. of the issued Ordinary Shares, on the Waiver Resolution, in which he is considered to be interested.
The Independent Directors, who have been so advised by UBS, consider the waiver of the obligation that could arise on W L Adderley to make an offer under Rule 9 of the Takeover Code in relation to the Authority to Make Market Purchases to be in the best interests of Independent Shareholders as a whole. In providing its advice to the Independent Directors, UBS has taken account of the Independent Directors' commercial assessments. Accordingly, the Independent Directors unanimously recommend that Independent Shareholders vote in favour of the Waiver Resolution to be proposed at the Annual General Meeting, as the Independent Directors intend to do in respect of their own beneficial holdings of Ordinary Shares, which amount to approximately 0.48 per cent. of the issued Ordinary Shares.
the Annual General Meeting of the Company to be held at 9.30 am on 16 November 2012, notice of which is set out in Part 12 of the Circular
"Authority to Make Market Purchases"
the authority for the Company to make market purchases of Ordinary Shares to be proposed to Shareholders in the terms of Resolution 15 set out in the notice of Annual General Meeting set out in Part 12 of the Circular
"B Share Dividend"
the dividend of 32.5 pence per B Share
the B non-cumulative non-redeemable preference shares of 0.001 pence each in the capital of the Company, the rights and restrictions of which are set out in Part 5 of the Circular
"B/C Share Entitlement"
the entitlement of Shareholders to receive one B Share or one C Share for each Ordinary Share held at the Ordinary Share Record Date and, where the context requires, the aggregate entitlement of a Shareholder to receive B Shares and/or C Shares
"B/C Share Scheme"
the transaction comprising the return of 32.5 pence per Ordinary Share by way of the Share Alternatives
the C non-cumulative non-redeemable preference shares of 0.001 pence each in the capital of the Company, the rights and restrictions of which are set out in Part 6 of the Circular
"Capital Option"
the allotment of C Shares proposed to be acquired by UBS on the Effective Date
a share or other security not held in CREST
"Company" or "Dunelm"
W L Adderley, W Adderley, J Adderley, N Adderley, The Leicester Foundation, the Paddocks Trust and W A Capital Limited
the system for the paperless settlement of trades in securities operated by Euroclear UK & Ireland Limited in accordance with the CREST Regulations
"Default Dividend"
the dividend of 32.5 pence per C Share to be declared on the Effective Date if such C Shares have not been purchased by UBS pursuant to the Purchase Offer and sent to holders of the C Shares on the Payment Date in the circumstances described in paragraph 3 of Part 3 of the Circular
the unlisted deferred shares of 0.001 pence each in the capital of the Company (the rights and restrictions of which are set out in Part 7 of the Circular) created on the automatic conversion of each B Share in respect of which the B Share Dividend is paid and each C Share in respect of which the Default Dividend is paid
the disclosure and transparency rules made by the FSA in exercise of its functions as competent authority pursuant to Part VI of FSMA
"Dunelm Group SAYE Scheme"
the Dunelm Group Savings Related Share Option Plan
the date to be determined by the Directors in their absolute discretion on which in the case of the Income Option the B Share Dividend is declared and in the case of the Capital Option the C Shares issued will be purchased by UBS under the Purchase Offer, or failing such purchase by UBS, the Default Dividend will be payable
the form enclosed with the Circular by which Shareholders may choose one of the Share Alternatives
"Equiniti"
a trading name of Equiniti Limited, the registrars of the Company
the general meeting of the Company to be held at 10:00 am on 16 November 2012 or as soon thereafter as the Annual General Meeting shall have concluded or been adjourned, notice of which is set out in Part 13 of the Circular
"Income Option"
the allotment of B Shares in respect of which the B Share Dividend will become payable
the directors of the Company other than W L Adderley, who are deemed not to be interested in the Waiver Resolution
Shareholders other than W L Adderley and members of the Concert Party
London Stock Exchange pIc or its successor
the Dunelm Group Long Term Incentive Plan
the official list maintained by the UK Listing Authority for the purposes of Part VI of FSMA
the agreement dated 15 October 2012 between the Company and UBS requiring the Company to purchase and UBS to sell, in each case as an off-market purchase, the C Shares and Deferred Shares purchased by UBS (as principal and not as agent, trustee or nominee) under the Purchase Offer, details of which are set out in paragraph 7 of Part 10 of the Circular
"Ordinary Share Record Date"
the date for determining participation in the B/C Share Scheme, which is expected to be 6.00 pm on 16 November 2012 (or such other time and/or date as the Directors may determine)
Shareholders resident in, or citizens of, jurisdictions outside the United Kingdom, including without limitation, US Holders
the date to be determined by the Directors in their absolute discretion (being in any event a date within 28 days of the Effective Date) on which funds are expected to be sent to Shareholders under the Income Option and/or the Capital Option
"Purchase Offer Deed"
the deed dated 15 October 2012 between UBS and the Company in respect of the Purchase Offer, details of which are set out in paragraph 7 of Part 10 of the Circular
the offer expected to be made by UBS, (acting as principal and not as agent, trustee or nominee) to purchase C Shares issued under the Capital Option the terms of which are set out in paragraph 7 of Part 10 of the Circular
as defined in section 285 FSMA
"Resolution" or "Resolutions"
the resolution(s) set out in the notice of General Meeting or notice of Annual General Meeting (as appropriate)
any of the United States, Canada, Australia, New Zealand, Japan and the Republic of South Africa
"Return of Capital"
the transaction comprising the B/C Share Scheme
"Share Alternatives"
the Income Option and the Capital Option
"Share Option Schemes"
the LTIP, Group Share Option Plan and Dunelm Group SAYE Scheme
(a) holder(s) of Ordinary Shares
shall, unless otherwise stated, be construed in accordance with the CA 2006 (but for these purposes ignoring paragraph 19(1)(b) of Part 1 of Schedule 6A to the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008)
Transfer to Escrow Instruction
the FSA acting in its capacity as the competent authority for listing under Part VI of FSMA and in the exercise of its functions in respect of admission to the Official List
"US Holder"
(i) a Shareholder with an address in the US on the Company's register of members; (ii) any person resident in the US who holds Ordinary Shares including directly, or as or through, a nominee, trustee or custodian; and (iii) persons who appear at any time to the Directors to fall within paragraph (ii) of this definition
the United States of America (including the states of the United States and the District of Colombia), its possession and territories and all areas subject to its jurisdiction
"Waiver Resolution"
Resolution 16 in the form set out in the notice of Annual General Meeting set out in Part 12 of this document approving a waiver of the mandatory offer provisions set out in Rule 9 and Rule 37 of the Takeover Code
the form enclosed with the Circular for use by Shareholders in connection with the Annual General Meeting
"yellow Form of Proxy"
the form enclosed with the Circular for use by Shareholders in connection with the General Meeting.
This announcement has been issued by, and is the sole responsibility of, Dunelm Group plc.
0871 384 2825 (from inside the UK)
Please note that for legal reasons the Shareholder helpline will only be able to provide information contained in this announcement, the Circular and the Election Form and will be unable to give advice on the merits of the B/C Share Scheme, the Share Alternatives or to provide financial, investment or taxation advice.
UBS Limited is authorised and regulated in the United Kingdom for the conduct of investment business by the Financial Services Authority and acting as financial adviser to Dunelm in connection with the Waiver Resolution and for no one else and will not be responsible to anyone other than Dunelm (whether or not a recipient of this announcement or the Circular) for providing the protections afforded to clients of UBS Limited nor for providing advice in relation to the proposals described in this announcement or the Circular or any other matter referred to in this announcement or the Circular. Persons other than Dunelm are recommended to seek their own financial and professional advice.
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