Link to: Archive    

Aimzine is a FREE online magazine for investors and everyone involved with AIM companies. If you are not already registered to read Aimzine please click HERE

Donald’s practice is mainly focused on corporate finance, takeovers, mergers and acquisitions and UK publicly listed companies. Approximately 60% of his work is in connection with AIM-listed companies and his firm have a team of 6 people who spend a high percentage of their time on AIM work.  

Understandably, there has been a considerable reduction in AIM IPO work in recent times, but Donald explained that they have been able to maintain a steady stream of work during the recession.  For example, Faegre & Benson have been working on secondary fundraisings, acquisitions and re-organisations for a number of AIM-listed companies.  Faegre & Benson also do much AIM work in China where their Shanghai office has all the necessary documentation in both English and Mandarin. As Faegre & Benson are a large international law firm with over 500 lawyers worldwide their international presence is helpful in winning such business.

Reducing Numbers of Companies...

Legal expertise has been required by a number of companies seeking to de-list from AIM. Donald explained that Companies should arrange a meeting of shareholders to agree on the proposed de-listing. In order to avoid the expense of a full blown takeover offer in order to provide an exit for existing shareholders, some companies have opted to use a ‘go-private-lite’ procedure where investors shares are bought back by the company at the time of de-listing. That procedure is only available where a company has sufficient reserves or an investor willing to finance the buy-back.  Donald did note that there is a loophole in the rules particularly for impecunious companies or unscrupulous boards, who could sack their Nominated Advisor (NOMAD) causing the company to be suspended and then de-listed after one month.

Donald Stewart: Faegre & Benson  

....and Advisors

The reducing number of AIM companies has received a lot of publicity, but the reduction in the number of Nomad’s has received little attention in the media. Much of Donald’s work is for Nomads and he has seen considerable change here in recent times. The number of Nomad’s has reduced from 84 to 68 which is seen to be a benefit in the longer term. (Aimzine featured one of the now departed Nomads in Dowgate last October. Dowgate were recently taken over by Astaire Group. To read this article please use the Archive facility at the foot of this article).

As a private investor, I would not normally deal with AIM legal experts so I asked Donald how relevant his work was to the private investors. He believes that Investors should take comfort from the fact that AIM companies are required to use specialist advisors and that the UK legal requirements for a prospectus mean that all facts as stated in an Admission Document are independently verified. In fact, it is the requirement for independent verification that takes a considerable percentage of the time in prospectus work. This is in contrast to other European countries and the USA where there is not a requirement for such independent verification of facts. I found his comments here reassuring, particularly in light of negative remarks that have been made about AIM by some US commentators.

Donald says that he is beginning to see some increase in M&A activity and fund-raising. This is positive news for his business and also for Donald in his other role as chairman of the QCA where he is also very much involved with AIM companies.

.....all facts as stated are independently verified

The Quoted Companies Alliance

Aimzine featured the Quoted Companies Alliance (QCA) in the January ‘Meet the Players’ article when their then CEO, John Pierce was our subject – to view this article see the archive feature below.

Donald has been involved with the QCA for some 7 years. In his role as chairman he has been busy in recent months particularly with the appointment of a new CEO in Tim Ward. Tim commenced his new role recently taking over from John Pierce who has recently retired.  Tim has experience from smaller quoted companies and senior positions at the London Stock Exchange bringing excellent credentials to this role.

The QCA has understandably lost some income during the economic downturn with a number of its members de-listing from the Stock Exchange and leaving the QCA. However, Donald is pleased that membership numbers were holding up strongly and that membership fee income was coming in on budget. He feels that this is a strong endorsement of the value of the QCA to its members during this difficult economic period.

The QCA has 8 technical committees and part of Donald’s role is also to ensure that the work of these committees does not overlap. He is also a serving member of the Legal Committee – see details of the QCA committees and their members here.  

One of the more pleasant jobs in his role at the QCA is attending the Annual Dinner. This function had been held the night before I met with him. The main speaker at this event was Xavier Rolet, Chief Executive of the London Stock Exchange. As we report elsewhere in this issue of Aimzine, in his speech at the dinner Xavier reaffirmed the London Stock Exchange's commitment to smaller quoted companies, both on the Main Market and AIM, and to working with the QCA to further promote the sector.

If you would like to comment on this article please click here

Written by: Michael Crockett, Aimzine

Copyright Aimzine Ltd

RETURN TO AIMZINE FRONT PAGE | October  2009

Discuss this article

on Aimzine Social