- Possible 15p take-out price is 50% discount to cash balance
by: James Quinn

Business information provider Hemscott appeared to be up for grabs this afternoon after the majority shareholder in the business in to which it reversed three years ago took steps to launch a bid for the entire company.

The possible take-out price of 15p-a-share values the company at 4.8 million, a 50% discount to the companys cash balance of 7.2 million at the end of December.

Chairman Michael Grade, the former television mogul, backed by the rest of the independent board, told shareholders not to take any action, in spite of the fact that the companys shares dropped back 2.9% in late trading.

The potential offer could come from longstanding board member Charles Jillings, the majority shareholder in Bridgend into which Hemscott reversed in August 2000, already owns 36.32% of Hemscott through his Co-operation Fund holding, and has call options on a further 14.06% of the companys shares.

Jillings, through his Dairy Brands New Zealand cash shell, would then own more than 50% of Hemscotts share capital, triggering an offer for the entire company.

Dairy Brands, a shell listed on the New Zealand stock exchange, has agreed an exercise price on the 14.06% holding owned by Peter Scott and Jill Meiring - of either 15p or three of its shares for every five Hemscott shares, or a combination of the two.

The decision to exercise its right to these options will be taken by an extraordinary general meeting of the company, to be held shortly, at which stage shareholders will also decide whether it wants to trigger an offer for the remaining part of Hemscotts share capital.

Jillings said that any offer for the rest of Hemscotts shares would be on the same basis, on which shares fell 0.5p to 16.5p.

Hemscott floated on AIM in August 2000 at 2.25p, after reversing into struggling Bridgend, and has provided news and information to the business community and to consumers ever since.

The shares could have further to fall if Dairy Brands shareholders vote to accept to exercise the options, with trading early Monday likely to brisk.