(Alliance News) - Hornby PLC on Thursday called a general meeting to ask shareholders to approve its exit from the AIM market in London and re-registration as a private limited company, ending nearly 30 years as a publicly traded company.
If approved by the April 1 shareholder vote, shares in the Margate, England-based model railway maker will be cancelled from trading on April 10. They were first admitted in 1996.
Horby shares fell 28% in response on Thursday in London to 13.75 pence. The stock is now down 63% in the past 12 months.
"Over recent years, Hornby has committed to implementing significant structural change and driving operational transformation for the benefit of all stakeholders in Hornby, not least its loyal shareholder base," Hornby said. "This commitment has been evidenced by the board's strategic actions including acquisitions, divestments and operational restructuring."
The company believes that its process of "structural change" will be best delivered away from the public market. "At the same time, the board is conscious of the limited liquidity of the company's shares on AIM balanced against the regulatory burden and cost of maintaining the public quotation."
Castelnau Group Ltd, with a 54.9% stake in Hornby, and investment trust Aurora, with a 14.9% stake, both have backed the move. Frasers Group PLC is Hornby's third largest shareholder, with a 9.1% stake, and Frasers majority shareholder Mike Ashley is a consultant to Hornby.
After the delisting, Hornby shareholders can keep their shares in the now-private company. Alternatively, they can swap their Hornby shares for shares of Castelnau, which is listed on specialist fund segment of the London Main Market.
Hornby shares also will be listed on the matched bargain trading facility offered by JP Jenkins.
"With a large number of smaller shareholders plus a few heavyweight institutional investors, this is far from being a straightforward transaction," commented JP Jenkins Commercial Director Veronika Oswald. "However, our proprietary technology has been designed to accommodate a wide range of investor structures."
Hornby added: "The board is well aware of the place Hornby has in the hearts of its loyal shareholder base, and the company's announcement today is not taken lightly.
"The directors are confident that operating as a private entity will provide Hornby with the necessary agility for swift decision-making and efficient execution of strategy whilst not depriving shareholders of material benefit."
By Tom Waite, Alliance News editor
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