www.finncap.com FinnCap www.finncap.com NOVEMBER 2010 THE ONLINE MONTHLY FOR THE ALTERNATIVE INVESTMENT MARKET JOURNAL In this issue NBNK poaches Hoffman from Northern Rock AIM shell NBNK Investments has poached of Hoffman. NBNK is thought to be keen to GENERAL NEWS Northern Rock chief executive Gary Hoffman buy the 600-branch network being sold by New issues to be its boss as it continues to search for Lloyds. 02 resurgence banking acquisitions. He won’t be buying Northern Rock, Northern Rock insisted that Hoffman though, at least not initially. NBNK has should not officially become chief executive agreed not to make a bid for Northern ADVISERS of NBNK until 1 May 2011. This caused Rock before 1 November 2011. Northland buys controversy because it meant that the NBNK raised £50m at 100p a share when 03 Astaire state-owned bank would have been paying it joined AIM in August. The board already Hoffman, who earns £700,000 a year includes Lloyd’s of London chairman Lord plus pension contributions and bonuses, Levene, who holds the same role at NBNK. for six months. Hoffman has waived his NBNK will need to raise a lot more cash NEWS entitlement to these payments. when it finds a bid target but it has a long AIM awards Hoffman joined Northern Rock from list of institutional investors, including 04 Barclays, where he had been head of Invesco, Aviva, Baillie Gifford, F&C, Barclaycard and the retail banking side. This Blackrock and JP Morgan, which have the NEWS retail banking experience is the attraction ability to back a deal if it makes sense. Walker Greenbank 06 rides recovery GLIF plans Main Market swoop DIVIDENDS AIM-quoted Greenwich Loan Income Advance UK Trust, which is being Fund Ltd (GLIF) wants to merge with liquidated, owns 13.3% of AMIC. The trust Asian Citrus grows fully listed investment company Asset has provided an irrevocable commitment to 07 income Management Investment Company (AMIC). vote in favour of any deal. Along with two AMIC shareholders will be offered cash or other shareholders, GLIF has irrevocables shares for their shareholding. The enlarged over 42.8% of AMIC’s share capital. QVT EXPERT VIEWS group would have gross assets of £200m – Financial owns 28.7% of AMIC via a CFD. Front line views assuming full take-up of a cash offer. The plan would be for the enlarged group 08 on AIM GLIF is a Guernsey-registered closed-end to obtain a Channel Islands Stock Exchange investment company whose focus is paying listing in addition to its AIM quotation. FEATURE a predictable dividend without harming Takeovers of Main Market companies its capital. It mainly invests in the US senior by their AIM-quoted counterparts are still Non-executive secured loan market but it has been looking rare but they do happen. In recent years, 09 directors for income-enhancing acquisitions. AMIC healthcare services provider Synergy is an investment trust investing in asset Healthcare bought sterilisation services management companies. GLIF is likely provider Isotron after a contested bid and STATISTICS to offer an 8% discount to AMIC’s NAV. It Vectura acquired fellow drug delivery Market indices and believes that cost savings can be made by company Innovata. Both companies 11 statistics combining the companies. subsequently moved to the Main Market. HubInvest publishes AIM Journal www.hubinvest.com FinnCap www.finncap.com general news Takeover activity increases in mining sector Takeover activity is heating up in more shares the bidder picks up. at the moment. Zimbabwe-based the mining sector but there appear The only independent director of mining house Metallon Gold to be plenty of new entrants willing Gladstone, Dominic Martino, has Zimbabwe has indicated that it to replace the companies leaving advised shareholders to reject the wants to join AIM before the end the market. bid unless they are short-term of the year in order to raise cash to African Diamonds has agreed investors. An independent expert reopen five of its mines. Metallon is a C$82m all-share bid from TSX says the bid is not fair and not a subsidiary of UK-based Metgold. Venture Exchange-quoted Lucara reasonable. Zanaga Iron Ore plans to raise Diamond Corp. For each share Steel maker and miner Severstal is cash to help it develop its Zanaga that they own, African Diamonds negotiating a cash bid for uranium iron ore project in the Republic of shareholders will receive 0.8 of miner Berkeley Resources. Berkeley’s Congo. Xstrata is spending up to a Lucara share and one share in board says that it would definitely $106m on a pre-feasibility study in Botswana Exploration, which itself recommend a bid of A$2 (123p) a return for an option over 50% plus plans an AIM flotation. share. Berkeley is raising A$4.8m at one share in Zanaga’s subsidiary Chromex Mining has agreed a bid A$1.45 a share in order to provide that owns its exploration licences. from Synergy Africa. The 36.5p a funding over the period of the If it takes up the initial option it has share cash offer values the chrome potential bid process. Berkeley to spend $100m on a full bankable producer at £37m. Synergy’s 51% signed a non-binding agreement feasibility study. If Xstrata does shareholder, Ruukki, owns processing with the Korea Electric Power not exercise its initial option then facilities and Chromex will provide a Corporation (KEPCO) to finance and Zanaga will use the cash it raises to secure source of chrome ore. develop the Salamanca uranium help it go alone. The £9.9m bid for Gladstone project. However, a Severstal bid Mining companies recently Pacific Nickel by 50% shareholder would render this agreement joining AIM include African Mining QNI Resources continues but with redundant and negotiations have & Exploration, CIC Mining Resources nominated adviser Grant Thornton been suspended. and Paragon Diamonds, which was resigning it appears that Gladstone Africa-focused mining companies spun out of AIM-quoted Obtala will be leaving AIM however many are particularly keen to join AIM Resources. AIM new issues show signs of resurgence Lock has gained more than one-third was coming to the market at the end on its introduction price of 15p. of October but it has not appeared Cleantech seems to be making yet. It has included $705,000 of AIM a comeback, with US-based water admission costs in its figures for the purifier HaloSource and India-based last two quarters. wind power generator Caparo There are some UK companies Energy floating in recent weeks. coming along. Cambridgeshire- ASX-listed Wasabi Energy, whose based potato supplier Produce New issues activity in general is main interest is in a business Investments is on course to raise picking up and many of the new commercialising waste heat £15m this month. Dental equipment entrants are international companies. technology using the Kalina Cycle, developer 3D Diagnostic Imaging Four Indian companies and two is joining AIM at the beginning of and oil explorer Wessex Exploration Chinese companies have floated in December. Wasabi is raising £4.9m are planning to switch from Plus- the past two months. All of them (A$7.9m) at 1.1p (A$0.018) a share, quoted to AIM. have gone to a premium to their which will value Wasabi at £27.8m All this suggests that there could flotation price and Indian call centre (A$44.9m). The current ASX share be a sustained recovery in the new operator iEnergizer is nearly 40% price is A$0.023. issues market but these signs have above its 116p placing price, while In September, LED technology appeared before and they have Chinese security company Global manufacturer ProPhotonix said it proved premature. 2 November 2010 HubInvest publishes AIM Journal HubInvest publishes AIM Journal www.hubinvest.com www.hubinvest.comwww.hubinvest.com www.finncap.com FinnCap www.finncap.com advisers Canadian broker snaps up Astaire Securities Canadian broker NCP Northland £2.9m of the Astaire Group’s income Brennan earlier this year after it Capital Partners has wasted little of £6.65m in the first half of 2010. The discovered accounting problems time in changing the name of Astaire broking business lost £635,000. at its Rowan Dartington subsidiary Securities to Northland Capital Astaire Group still owns the which meant that it did not have the Partners Ltd following its acquisition Rowan Dartington private-client financial strength to go ahead. of the AIM broker on 15 October. business but it is also up for sale. Fox-Davies Capital is applying to NCP already has offices in Toronto Litigation against the group which become the latest nominated adviser. and Vancouver and is keen to expand relates to Izodia is against a separate There is also activity in the market internationally. Astaire Securities has subsidiary and intermediate holding maker community. Schneider more than 40 clients and its recent company, Corporate Synergy, Trading has recently commenced focus has been on the oil and gas, and that stays part of Astaire market making in AIM shares. mining and technology sectors. NCP Group. Astaire Securities has paid According to the September 2010 does not have exposure to oil and £37,000 to cover claims against AIM statistics Schneider makes gas but it does also specialise in life it by Izodia. The cash paid for the markets in 32 AIM companies. They sciences and infrastructure. Stuart broking business will be retained in are oil and gas, mining and cleantech Lane has become executive chairman Corporate Synergy to cover these companies. The firm is part of of the UK business. litigation claims so Astaire Group Schneider Group, which was founded AIM-quoted Astaire Group sold shareholders will not be getting any in 1998, and has offices in London, Astaire Securities to NCP for £2.45m cash in the short term.