LSE-listed mineral sands producer Kenmare Resources has launched an odd-lot offer pursuant to which shareholders holding fewer than 200 ordinary shares in Kenmare will be offered the opportunity to sell their shares at a 5% premium to the market price.
At the company’s annual general meeting held on May 26, shareholders approved that an odd-lot offer could be made at any time within 18 months, which the board has now decided to proceed with.
The odd-lot offer, which opened on August 24, will close on September 30.
Shareholders with registered addresses in Ireland and the UK, who were odd-lot holders on the first record date of April 21 and who remain odd-lot holders on the second record date of September 30 have been invited to tender their ordinary shares for purchase by Kenmare.
The price per ordinary share to be paid to odd-lot holders whose ordinary shares are repurchased will be £4.82.
Kenmare explains that it has an unusually large number of small shareholders for a company of its size, as a result of its 2016 restructuring and recapitalisation exercise.
The company has more than 3 800 shareholders of whom about 3 415, or 88.96%, are small shareholders who hold fewer than 200 ordinary shares and, in aggregate, represent less than 0.2% of the total number of ordinary shares in issue.
The odd-lot offer will facilitate the disposal by eligible odd-lot holders of their shares at a 5% premium without the dealing costs that would typically render such disposal uneconomic, while giving active shareholders the ability to opt-out of such a disposal by making the requisite election.
Kenmare’s directors believe the odd-lot offer will benefit shareholders as a whole, as it will lower the company’s cost base and facilitate a reduction in the number of shareholders in an equitable manner.
The company said any shareholder who wishes to remain a shareholder may elect to do so.
The maximum number of ordinary shares eligible to participate in the odd-lot offer is about 105 802, representing less than 0.2% of the issued share capital of the company. Therefore, if all eligible odd-lot holders participated in the odd-lot offer, the maximum cash consideration payable to such odd-lot holders would be about £510 000.