FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
12 January 2005
mmO2 plc
Wellington Street
Slough, Berkshire SL1 1YP, England
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F
Form 20-F..X... Form 40-F.....
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act
of 1934.
Yes ..... No ..X...
If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b): 82 ________
Enclosure:
Copy of announcement regarding Scheme of arrangement sent to the
London Stock Exchange on 12 January 2005
press release
PR0501
CORPORATE REORGANISATION TO CREATE DISTRIBUTABLE RESERVES
Released: Wednesday 12 January 2005
mmO2 plc ("mmO2" or the "Company") announces that it will be posting a circular
(the "Circular") to its shareholders in connection with the proposals announced
on 17 November 2004 to implement a sustainable dividend policy and make
distributions to shareholders (the "Proposals"). The Proposals involve a
corporate reorganisation whereby mmO2 will be acquired by a new company, O2 plc,
which will then effect a reduction of its share capital to create distributable
reserves. It is proposed that the reorganisation takes place by way of a Court
approved scheme of arrangement (the "Scheme").
Review of the fragmented shareholder base
As a legacy of the demerger from BT in November 2001 the Board has recognised
that the mmO2 share register includes a large number of very small shareholders.
As at 31 December 2004, 1,040,778 shareholders owned between 1 and 600 shares,
representing 63.0 per cent of mmO2's shareholders by number, but only 3.5 per
cent of mmO2's issued share capital.
The cost of servicing such a large number of shareholders is significant. In
many cases it is likely to cost O2 more to send dividend cheques to its small
shareholders than the amount of the dividend they are receiving. The Board of
mmO2 also recognises that these shareholders may not be able to sell their
holdings without incurring disproportionate transaction costs. The Board has
therefore sought to offer smaller shareholders the means to realise their
holdings in mmO2 cost effectively and at the same time help to reduce the
fragmentation of mmO2's shareholder base.
Under the Scheme, mmO2 shareholders will, in effect, exchange their existing
shares in mmO2 for new shares in O2 plc on a one for one basis. mmO2
shareholders have the option of electing to receive, in exchange for their
existing shares in mmO2, either new shares in O2 plc or cash consideration under
the Cash Alternative. Shareholders who take no action will be deemed to have
elected for the Cash Alternative. This cash consideration will consist of the
amount received through a placing in the market of the new shares to which
shareholders would otherwise be entitled, plus a premium of 5 pence per share
financed by mmO2. The value of the Cash Alternative will be the price at which
the new O2 shares are placed (subject to a minimum of 105 pence per share,
including the premium of 5 pence per share, to protect shareholders in the event
of adverse market conditions).
The size of the Cash Alternative (and therefore the size of the placing) will be
decided by the Board but is expected to be limited to approximately 300 million
O2 plc shares. If elections for the Cash Alternative exceed this limit, they
will be scaled back at the discretion of the Board. Scaling back is expected to
be on a basis which ensures that elections by holders of smaller numbers of
shares are met in full. In the event that such scaling back does take place,
elections in respect of larger holdings are unlikely to be successful. The
Placing, which will be conducted by Cazenove & Co. Ltd and Merrill Lynch
International, will take place after the Scheme becomes effective.
Review of the US listing and ADR programme
The Board of mmO2 has also reviewed the US listing and the associated ADR
programme which is also a legacy of the demerger from BT. mmO2 has no business
operations in the US, nor any intention to develop any. Since the demerger,
trading volumes and the number of ADRs outstanding have declined and the
majority of larger US shareholders hold shares in mmO2 directly rather than in
ADR form. Therefore, as part of the Proposals, mmO2's ADRs will be delisted from
the New York Stock Exchange at the time that the Scheme becomes effective and O2
will not establish an ADR programme nor a US listing for the new shares in O2
plc.
Review of continuing SEC registration
The Board has also reviewed the consequences of continued SEC registration.
Registration with the SEC results in duplicative compliance, reporting and
internal control requirements and results in costs that are disproportionate to
any commercial benefit arising from continued registration.
SEC regulations stipulate that de-registration can occur only if the number of
US Resident Shareholders has fallen below 300. Furthermore, the number of US
Resident Shareholders in O2 must remain below the 300 limit for a period of 18
months after de-registration. The existence of a relatively small number of US
Resident Shareholders therefore creates a disproportionate and duplicative
regulatory burden for the Company to the detriment of all shareholders.
Accordingly, in order to facilitate the de-registration of the New Ordinary
Shares, the O2 Articles will include temporary provisions to limit ownership of
the shares by US Resident Shareholders. The provisions will facilitate O2 plc's
intention to deregister from the SEC. The timing of any application to
deregister has not yet been determined by the Board.
Approval process
The Approval of these Proposals will be sought at a Court Meeting and an
Extraordinary General Meeting ("EGM") (both of which will be held on 14 February
2005 at The Queen Elizabeth II Conference Centre, Broad Sanctuary, Westminster,
London SW1P 3EE). The Scheme also requires the sanction of the High Court.
Subject to shareholder and High Court approval, it is expected that mmO2's
existing ordinary shares will cease to be traded on the London Stock Exchange at
the close of business on 11 March 2005 and that O2 plc's ordinary shares will be
admitted to the Official List and commence trading on the London Stock Exchange
at 8.00 a.m. on 14 March 2005. Application has been made to the UK Listing
Authority for the listing of, and to the London Stock Exchange for the admission
to trading of, up to 9,000,000,000 ordinary shares of O2 plc.
Summary of timetable
The key dates in the expected timetable for the Scheme are:
2005
Latest time for receipt of Form of Proxy for the Court 9.30 a.m. on 12
Meeting February
Latest time for receipt of Form of Proxy for the EGM 9.45 a.m. on 12
February
Voting Record Time for Court Meeting and EGM 6.00 p.m. on 12
February
Court Meeting 9.30 a.m. on 14
February
EGM 9.45 a.m. on 14
February
Latest time for receipt of Forms of Election for new O2 shares 5.00 p.m. on 9
or cash alternative March
Court Hearing of the petition to sanction the Scheme 10 March
Last day of dealings in Existing Ordinary Shares 11 March
Scheme Effective Date 14 March
Dealings in New Ordinary Shares issued under the Scheme 8.00 a.m. on 14
commence on the London Stock Exchange March
Recent developments
Since 30 September 2004, trading has been in line with the full year outlook
stated in the interim results announcement on 17 November 2004. Trends in
revenues and costs since 30 September have been consistent with the half year to
30 September delivering anticipated customer numbers and margins. The Board
believes, based on our performance in the year to date, that the O2 Group will
report financial performance for the current financial year in line with the
full year outlook stated in the interim results announcement and is well placed
to continue to develop its business in line with its strategy.
The current trading statement, which has not changed from that given in the
outlook section of the interim results announcement made on 17 November 2004,
can be interpreted under the Listing Rules as a forecast that full year EBITDA
before exceptional items for the Group for the financial year ending 31 March
2005 will be materially higher than for the financial year ended 31 March 2004.
The Directors confirm this forecast.
Copies of the Circular and listing particulars relating to O2 plc have been
submitted to the UK Listing Authority and will be available shortly for
inspection at the UK Listing Authority's Document Viewing Facility situated at:
The Financial Services Authority,
25 The North Colonnade,
Canary Wharf,
London E14 5HS
(Tel: +44 (0)20 7676 1000)
and also on the mmO2 website (www.mmO2.com).
Shareholders who have any questions about the Proposals can call the Shareholder
Helpline on telephone number freephone 0808 100 4102 (+44 1903 702767 if you are
calling from outside the UK) open from Monday to Friday, 8.30 a.m. to 6.00 p.m.
(UK time). For legal reasons the Shareholder Helpline will not be able to
provide advice on the merits of the Proposals or to provide financial or
taxation advice.
-ends-
mmO2 Contacts:
Richard Poston David Boyd
Director Corporate Affairs Head of Investor Relations
mmO2 plc mmO2 plc
Richard.poston@o2.com david.boyd@o2.com
t: +44 (0)1753 628039 t: +44(0)1753 628230
David Nicholas John Crosse
Director of Communications Investor Relations Manager
mmO2 plc mmO2 plc
david.nicholas@o2.com john.crosse@o2.com
t: +44 (0) 771 575 9176 t: +44 (0) 1753 628198
Simon Gordon
Press Relations Manager
mmO2 plc
simon.gordon@o2.com
t: +44 (0) 771 007 0698
Cazenove & Co. Ltd Merrill Lynch International
Edmund Byers +44 (0)20 7155 8606 Mark Astaire +44 (0)20 7996 4789
David Harvey-Evers +44 (0)20 7155 4586 Oli Greaves +44 (0)20 7996 1200
Philip Yates +44 (0)20 7628 1000
mmO2 press office: 01753 628402
All mmO2 Group news releases can be accessed at our web site: www.mmo2.com
Cazenove & Co. Ltd and Merrill Lynch International, each of which is regulated
in the United Kingdom by the Financial Services Authority, are acting
exclusively for mmO2 plc and O2 plc and no one else in connection with the
Proposals and will not be responsible to anyone other than mmO2 plc or O2 plc
for providing the protections afforded to their customers or for providing
advice to any other person in connection with the listing of the New Ordinary
Shares or any other matter referred to in this announcement.
The distribution of this announcement in jurisdictions other than the UK may be
restricted by law and therefore persons into whose possession this announcement
comes should inform themselves about and observe any such restrictions. Any
failure to comply with these restrictions may constitute a violation of the
securities laws of any such jurisdiction.
Notice to United States residents
The new shares in O2 plc will not be, and are not required to be, registered
with the US Securities and Exchange Commission under the US Securities Act of
1933, as amended (the "Securities Act") in reliance upon the exemption from the
registration requirements of the Securities Act provided by rule 802 promulgated
under that act for certain business combinations.
The Proposals announced under the Scheme are made with respect to the securities
of companies incorporated in England and Wales. The Circular being posted and
its related documents are subject to the disclosure requirements of the United
Kingdom, which are different from those of the United States. Financial
statements included in such documents, if any, have been prepared in accordance
with accounting principles generally accepted in the United Kingdom, which may
not be comparable to the financial statements of United States companies.
It may be difficult for shareholders who receive the Circular and its related
documents to enforce their rights and any claim they may have arising under US
federal securities laws, since mmO2 is, and O2 will be, located in the United
Kingdom, and some or all of mmO2's officers and directors may be residents of
the United Kingdom. Shareholders may not be able to sue a non-US company or its
officers or directors in a non-US court for violations of the US securities
laws. It may be difficult to compel a non-US company or its affiliates to
subject themselves to a US court's judgment.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
mmO2 plc
Date: 12 January 2005 By:___/s/ Robert Harwood___
ROBERT HARWOOD
Assistant Secretary