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LONDON - Virgin Wines UK PLC (AIM: LON:VINO), a leading direct-to-consumer online wine retailer in the UK, has announced its intention to repurchase shares and is seeking a waiver from certain takeover rules. The company informed shareholders of these developments through a circular and a notice of an upcoming General Meeting.
The General Meeting is scheduled to take place at 9:00 a.m. on Monday, February 24, 2025, at the Tickled Trout Hotel in Preston. The agenda includes a proposal for a share buyback program and a waiver related to Rule 9 of the City Code on takeovers and mergers.
Despite having authorization from shareholders to buy back up to 8,395,861 Ordinary Shares, representing 15% of the shares in issue, a condition prevents the company from proceeding. A Concert Party, a group of shareholders acting in agreement, controls between 30% and 50% of voting rights, which could obligate them to make a cash offer for the entire issued share capital if Virgin Wines were to buy back its own shares.
To avoid this, the company is seeking a waiver from the takeover rule, which has been conditionally granted by the Takeover Panel, provided the waiver resolution receives approval by a majority of independent shareholders.
The Board and Independent (LON:IOG) Directors recommend that shareholders vote in favor of the waiver, stating that the share buyback program is a means to return surplus cash to investors and to satisfy options under the Long-Term Incentive Plan (LTIP). Panmure Liberum, the company's independent financial adviser, has endorsed the terms of the proposals.
As of June 28, 2024, Virgin Wines reported a strong financial position with an audited net cash balance of £10.3 million and no debt. The company's capital allocation policy continues to be reviewed, considering options like organic growth, mergers and acquisitions, initiating a dividend policy, and the share buyback program.
The information in this article is based on a press release statement from Virgin Wines UK PLC.
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