London, Monday 20 November 2000 - Today at an Extraordinary General Meeting (EGM) shareholders of LIFFE voted to support the Board’s plans to work with Cap Gemini Ernst & Young, Battery Ventures and The Blackstone Group to develop the existing exchange business and exploit technology opportunities associated with LIFFE CONNECT™, LIFFE’s electronic trading system. Shareholders approved a placing and open offer of 10 million new ordinary shares at £6 per share which will raise £57 million, net of expenses. LIFFE’s shareholders applied for 2.3 million (68%) of the 3.3 million new ordinary shares available in the open offer.
Boston-based Battery Ventures and the New York and London-based private equity firm The Blackstone Group will subscribe for approximately 7.7 million new ordinary shares, under the placing and open offer. Following completion of the proposals, Battery and Blackstone, together with parties deemed to be acting in concert with them, will hold in aggregate 7,772,770 ordinary shares, representing 29.4% of the enlarged issued ordinary share capital.
In addition, resolutions were approved to (i) grant the investors a warrant to subscribe for further ordinary shares at £12 per share which may increase their shareholding to up to 40 per cent of the share capital of the company; (ii) authorise the Board to implement employee share incentive schemes and (iii) adopt new Articles of Association. Dr Richard Sandor and Mr Scott Tobin will join the LIFFE Board as non-executive directors.
The above is subject to completion, expected to take place later this week, of (i) the open offer and (ii) the placing.
LIFFE’s Chairman, Brian Williamson, said: “The result of the EGM is strong affirmation of our strategy. The very positive support of our new investors and our existing shareholders heralds a new chapter for LIFFE. We are now able to forge ahead with our plans to develop further our existing exchange business and fully realise the potential of our technology assets.”
Chinh Chu, Senior Managing Director of The Blackstone Group commented, “Blackstone and Battery are very pleased to be shareholders of and partners with LIFFE. We believe that LIFFE is well positioned to capitalise on the core attractive business fundamentals and the growing trend of converting conventional exchanges to electronic trading platforms.”
The directors of LIFFE (Holdings) plc accept responsibility for the information contained in this announcement. To the best of the knowledge and belief of the directors of LIFFE (Holdings) plc (who have taken all reasonable care to ensure that such is the case), the information contained herein for which they are responsible is in accordance with the facts and does not omit anything likely to affect the import of such information.
Notes to Editors
1. Each of the resolutions at the EGM was approved by 8,531,675 votes in favour and 194,800 votes against. Votes in favour represent 97.7% of the votes cast.
2. Mr Scott Tobin is a managing member of Battery Partners, the general partner of Battery Ventures. Mr Tobin focuses on e-commerce and internet technologies and has specific experience and interest in B2B trading hubs and exchanges, internet infrastructure and the supply and demand chains.
3. Dr. Richard Sandor became known as the ‘principal architect of interest rate futures markets’ during three years as Vice President and Chief Economist at the Chicago Board of Trade. He was later honoured by the CBOT and the City of Chicago as the ‘father of financial futures’. Dr Richard Sandor is Chairman and Chief Executive Officer of Environmental Financial Products L.L.C., which specialises in developing and trading in new environmental, financial, and commodity markets. He is a Senior Adviser to PricewaterhouseCoopers on greenhouse gas emissions trading and holds a number of directorships.
4. Battery Ventures, with offices in Wellesley, MA and San Mateo, CA, is a global venture capital firm that creates and builds world-class, category-leading companies by assembling the key ingredients for success: management, technology, partnerships and capital. It is a leader in the financing of telecom, software, e-commerce/internet companies and business-to-business marketplaces. Battery Ventures currently holds $1.8 billion capitalised under management with investments in over 100 companies.
5. The Blackstone Group, L.P., a private investment bank with offices in New York and London, was founded in 1985 by its Chairman, Peter G. Peterson, and its President and CEO, Stephen A. Schwarzman. Since 1987 Blackstone has raised over US$8 billion for private equity investing, including a US$2 billion fund targeting telecommunications and technology investments. The Blackstone Group’s core business areas include Mergers and Acquisitions Advisory, Restructuring and Reorganisation Advisory, Private Equity Investing, Private Real Estate Investing, Private Mezzanine Investing and Liquid Alternative Asset Management.
6. On 6 June 2000 LIFFE signed a Memorandum of Understanding with Cap Gemini Ernst & Young (CGEY) which is one of the largest information technology and management consultancy firms in the world and is publicly listed on the Paris Bourse. CGEY offers management and IT consulting services, systems integration, and technology development, design and outsourcing capabilities on a global scale to help traditional businesses and “dot companies” continue to explore growth strategies in the new economy. The recently formed organisation employs more than 57,000 people worldwide and reports global revenues of 7.7 billion euros (1999). More information about individual service lines, offices and research is available at www.capgemini.com.
7. LIFFE’s advisers in putting together the arrangements approved by shareholders today include Deloitte & Touche Corporate Finance and Clifford Chance Limited Liability Partnership.
8. LIFFE CONNECTTM is the only electronic trading system in the world successfully to trade complex short-term interest rate futures in high volume. LIFFE CONNECT ™ trades an average daily nominal value of £300 billion. It is already available in 22 countries, providing access to more than 14,500 traders across all time zones.
9. All of LIFFE’s financial futures and options contracts, formerly traded by open outcry, have migrated to LIFFE CONNECTTM in the last 24 months. LIFFE’s commodity contracts will make the switch on 27 November 2000.
10. The last traded price in LIFFE’s shares at the close of business on 17 November 2000 was £6.60. Up to date information on LIFFE’s share price is available on Reuters, Page Caza.