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LONDON - Argo Group Limited, a company listed on the AIM market of the London Stock Exchange (LON:LSEG), has proposed a tender offer to buy back shares and plans to cancel its listing, subject to shareholder approval. The tender offer will allow shareholders to sell their shares back to the company at a premium price before the delisting.
The tender offer is set to purchase up to 11,221,673 ordinary shares at 5 pence each, representing a premium of 25% over the closing mid-market price on the last business day before the announcement. This buyback is an opportunity for shareholders to liquidate their investments ahead of the delisting.
Shareholders holding approximately 71.2% of Argo's issued share capital, known as the Concert Parties, have agreed not to tender their shares and to vote in favor of the delisting. The cancellation of the listing on AIM is contingent on a special resolution at the Annual General Meeting, scheduled for Monday, 10 February 2025, where a 75% majority is required. With the Concert Parties' support, the resolution is expected to pass.
The rationale behind the delisting includes the company's size being too small to attract significant investor interest, difficulty in accessing equity capital, and high costs relative to the benefits of maintaining the AIM listing. The Board believes that the tender offer and subsequent delisting will be in the best interest of the company and its shareholders.
The tender offer is scheduled to open on Friday, 17 January 2025, with the expected cancellation of the AIM listing to take effect from 7:00 a.m. on Wednesday, 19 February 2025. Shareholders not participating in the tender offer will find their shares less liquid and potentially more difficult to trade post-delisting.
Argo's recent financial performance indicates management fees remained stable year-on-year, with a slight increase in performance fees in the second half of 2024. However, the company does not anticipate sustainable profits based solely on management fees and will continue to rely on performance fees.
The company's move is a significant change in its capital markets strategy and could impact shareholder liquidity and the marketability of their shares. This announcement is based on a press release statement from Argo Group Limited.
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