Law firm assists with delisting

May 20 2009 by Peter McCusker, The Journal

LAW firm Mincoff Jacksons assisted North East property development and construction company Metnor Group delist from the stock market.

After 10 years on the Alternative Investment Market (AIM), Metnor decided to delist from the London Stock Exchange saying it believed it was “undervalued”.

Newcastle-based Metnor announced its proposal to delist on March 3, 2009 and, following shareholder approval for the proposal, the company was delisted from the London Stock Exchange last month.

Paul Hughes, partner in the corporate team at Mincoff Jacksons in Newcastle, said: “We were delighted that Metnor chose to instruct us on the delisting.”

He explained that traditionally a delisting is affected by a ‘take private’ transaction. This requires a new company to make a formal offer to buy all the shares of the company to be delisted and then, on the successful completion of that offer, the target company delists and becomes private.

The transaction costs associated with this are invariably substantial and the timescale runs into several months. For those reasons the traditional ‘take private’ option is not particularly attractive to many small or mid-cap listed companies.

Mr Hughes said: “In the case of Metnor’s move off the stock market, the Mincoff Jacksons team came up with a solution that saved the company much time and expense.”

By establishing a matched bargain arrangement in which shareholders could trade in their shares off market, Metnor was able to persuade the requisite number of shareholders to sanction the proposal to delist.