Chime announces that on 31st December 2005 it exercised its option to sell the remaining shares (51%) that it holds in HHCL to WPP.
The consideration payable will be calculated in accordance with the agreement between Chime and WPP dated 15th January 2003 as 51% of eight times the average pretax profits of HHCL for the years ended 31st December 2005 and 2006 subject to an overall cap of £12 million. A non-refundable advance payment of £2.75 million has been paid. The current outlook for 2006 suggests that no additional payment will occur.
The Company also announces that it will use some of the proceeds from the sale to begin a programme to purchase Chime Ordinary Shares, on its own behalf over the next few years for cancellation. This programme will commence after the announcement of Chime’s preliminary results on 8th March 2006.
Any share purchase will be effected within certain pre-set parameters, and in accordance with the authority to repurchase shares given at the Company’s Annual General Meeting, which is subject to annual renewal. Any purchases will also be made in accordance with Chapter 12 of the Listing Rules which requires that the maximum price paid be limited to no more than 5% above the average market value for the shares as derived from the London Stock Exchange Daily Official List for the five business days immediately prior to such purchase.
The Directors believe that the implementation of this share buy-back programme will result in a more efficient capital structure for the Company as well as enhancing the Company’s earnings per share.
For further information, please contact:
Lord Bell, Chairman, Chime Communications plc on Tel: 020 7861 8515
Chris Satterthwaite, Chief Executive, Chime Communications plc on Tel: 020 7861 8515
Robin Tozer, Bell Pottinger Corporate and Financial on Tel: 020 7861 3891
