TIDMSIM
RNS Number : 5026B
SimiGon Limited
11 February 2022
SimiGon Ltd
("SimiGon" or the "Company")
Update related to the Notice of Special General Meeting of
Shareholders
SimiGon Ltd. (LON: SIM) wishes to update shareholders that on
February 9, 2022 the lawyers of D.D. Goldstein Real Estates and
Investments Ltd. ("Goldstein") sent a letter to the attorneys of
the Company and its directors, setting out a draft (and therefore
non-binding) tender offer for a portion of the Company's shares
(the "Draft Tender Offer").
As previously notified, Goldstein have filed an application for
approval of a derivative action. Goldstein have not submitted a
position paper with regards to the Merger Proposal announced in the
Notice of Special General Meeting of Shareholders ("Shareholders
Meeting") issued by the Company on January 14, 2022 (the
"Notice").
SimiGon's Board of Directors (the "Board") cannot attest to the
certainty that an actual tender offer will actually be submitted.
The Draft Tender Offer provides a draft of the proposed terms that
could be included in the final offer. SimiGon has not been provided
with any further clarity on when or if the Draft Tender Offer will
be made binding (if at all). The Draft Tender Offer is therefore
not currently capable of acceptance and there can be no assurance
that any offer will be made.
An electronic copy of the Draft Tender Offer is available on the
Company's website: https://www.simigon.com/draft-to .
The Board have considered its merits of the Draft Tender Offer,
as presented, and compared to the Company's existing strategy to
merge with Maxify. The Board have concluded, for the reasons set
out below, that the Draft Tender Offer is an inferior proposal for
the Company's shareholders and have resolved not to postpone the
Shareholders Meeting
The Board believes that the Draft Tender Offer is an inferior
proposal to SimiGon and its shareholders compared to the actual
binding Merger Proposal and therefore does not propose any changes
to the Notice of Special General Meeting of Shareholders issued by
the Company on January 14, 2022.
The primary considerations for the Board's conclusion are
summarized below:
-- The Draft Tender Offer is still subject to additional data
and approvals required and it does not include a commitment to the
date by which it will be submitted and become legally binding. The
Draft Tender Offer includes a long list of conditions to the offer.
The Board believes some of these conditions are not likely or
simply cannot be fulfilled and therefore that Goldstein's true and
primary intent is to prevent the Merger Proposal (as stated by
Goldstein in the Draft Tender Offer).
-- The Draft Tender Offer seems to explicitly worsen the status
of the shareholders who will accept it relative to the alternative
available to shareholders today, which is not to approve the Merger
Proposal on the basis that if shareholders do not approve the
Merger Proposal, then the Company will continue to operate as a
publicly traded company on the AIM and Goldstein can continue its
application for approval of the derivative claim. Assuming
Goldstein will prevail and under further assumption that there will
be a court ruling in which the defendants will be obligated to pay
the full "damage" claimed, the entire amount will be available to
the Company. In this event, assuming that the Company will be able
to distribute a dividend to its shareholders, each shareholder will
receive 100% of the dividend that will be distributed for their
shares. On the other hand, in the Draft Tender Offer, the same
shareholder who accepted the Draft Tender Offer and sold shares to
Goldstein will receive a dividend from him at a rate of only 50%
for the shares sold.
-- The Draft Tender Offer does not provide an offer to purchase
all SimiGon shares but rather only an aggregate amount of 9,025,000
to 12,600,000 Shares compared to the Merger Proposal in which the
merger applies to all SimiGon shareholders.
-- The Merger Proposal that is subject to the approval of the
Company's shareholders, is made on the basis of a fully-diluted
valuation of the Company of $8,500,000, representing a premium of
226.86% to the average closing price on the AIM Market for the last
12 months, a premium of 250.66% to the average closing price on the
AIM Market for the last 6 months, a premium of 285.54% to the
closing price on the AIM Market on the last full trading day
immediately preceding the public announcement of the Merger and a
premium of 285.54% to the closing price on the AIM Market on
Thursday, 13 January 2022 (being the most recent practicable date
prior to the date of this announcement). On the other hand, the
Draft Tender Offer offers a cash consideration of 6.7 Pence per
share, which it claims reflects a premium of 21.8% in relation to
the closing price of the share on the trading day preceding the
Draft Tender Offer; however, a true comparison of the share price
in the past three weeks since the Notice shows that the average
share price is 6.2 Pence per share, reflecting an actual premium of
8%. Even if the Board accepts the premium claimed by Goldstein,
including the theoretical conditional additional consideration, the
Merger Proposal provides a significantly better premium to all
SimiGon's Shareholders.
-- In addition, the conditional price instalment offered by
Goldstein, according to which Goldstein will distribute to the
shareholders who approve the Draft Tender Offer an additional
consideration of 50% of the dividend allegedly received by
Goldstein after the application for approval of the derivative
claim submitted by Goldstein (the "Conditional Price Instalment"),
is theoretical, abstract and far from certain - especially since
the request for approval of a derivative claim is still in its
initial stages.
There is no certainty that dividends will be distributed to
shareholders in order to execute the Conditional Price Instalment,
as there is no guarantee that the Company will meet the required
dividend distribution test at an unknown future date nor on the
ability of Goldstein as a shareholder of the Company to execute a
distribution of dividend, taking into account that legally only the
Board has authority to approve distribution of dividends.
-- The Draft Tender Offer includes only a vague description of
how it is expected to improve future business growth of the Company
and improve returns to shareholders, as compared to the Merger
Proposal.
-- It appears that the Draft Tender Offer in jurisdictions
outside the United Kingdom or to certain persons not resident in
the United Kingdom or who are citizens, residents or nationals of
other countries outside the United Kingdom may be prohibited or
affected by the laws of the relevant jurisdictions. The Merger
Proposal applies to all shareholders.
While, in the opinion of the Board, the Draft Tender Offer also
includes multiple flawed statements and serious inaccuracies with
respect to the Merger Proposal, the Board resolved, at this stage,
to only address and focus on the proposed terms of the Draft Tender
Offer and not on correcting these statements; SimiGon's lawyers
have sent a letter to Goldstein's lawyers in this regard.
As provided above, the Board believes that the Draft Tender
Offer is an inferior proposal to SimiGon and its shareholders
compared to the actual binding Merger Proposal. In addition, a
delay of the Shareholders Meeting could jeopardize the Merger
Proposal. For these reasons the Board does not propose any changes
to the Notice or delaying the Shareholders Meeting.
Enquiries:
SimiGon Ltd
Ami Vizer, Chief Executive Officer and Executive Tel: +1 (407) 951
Chairman 5548
Efi Manea, Chief Financial Officer
www.simigon.com
finnCap (NOMAD & Broker)
Henrik Persson / Milesh Hindocha (corporate Tel: +44 (0) 20 7220
finance) 0500
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END
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February 11, 2022 13:26 ET (18:26 GMT)
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