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.
