Merchant Securities to exit Aim

Merchant Securities has applied to the London Stock Exchange to cancel its trading of the company’s shares, following its acquisition by Sanlam Private Investment Holdings (SPIH).

In November 2011, around 93 per cent of Merchant Securities Group’s shareholders voted in favour of the take-over of the firm by South Africa-based Sanlam Private Investment Holdings, subject to approval from the Financial Services Authority (FSA).

On 31 October, SPIH offered to buy the ordinary share capital of Merchant Securities for £12.2m.

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Following completion of the acquisition agreement the stock broker will be 75 per cent owned by Sanlam UK, while Merchant’s management team will have a 25 per cent stake in their business.

SPIH announced to the stock exchange on 24 November that the offer has “become unconditional” as to acceptances and will remain open for acceptance until further notice.

As SPIH owns or has acceptances in respect of more than 75 per cent of Merchant shares, cancellation will take place without the approval of Merchant shareholders.

SPIH claimed such cancellation will significantly reduce the liquidity and marketability of any Merchant shares not acquired by SPIH.

Following cancellation, SPIH intends to procure that Merchant re-registers from a public limited company to a private limited company.

As SPIH has received acceptances under the offer in respect of 90 per cent or more in value of Merchant shares, SPIH intends to exercise its rights in accordance with sections 974 to 991 of the Companies Act to acquire compulsorily the remaining Merchant shares on the same terms as the offer as soon as reasonably practicable.

The offer will however remain open for acceptance until further notice.

The company also announced it sold a total of 2,174 Merchant shares yesterday (16 January), representing its entire holding of treasury shares, to SPIH for cash at the offer price.

In addition, the company announced on the London Stock Exchange that John Green, non-executive chairman, John East, executive director, and Charles Price, non-executive director, stepped down from the board yesterday (16 January).