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MXC Capital to demerge unit, begin tender offers

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MXC Capital to demerge unit, begin tender offers

British technology-focused merchant bank MXC Capital Ltd.'s board is proposing to demerge unit MXC Capital UK Ltd. into a new business and list it on The International Stock Exchange in Guernsey.

In September 2018, MXC Capital sold a 25% stake in MXC Capital UK to U.K.-based investment holding company Ravenscroft Holdings Ltd., in a deal that valued the division at £9 million.

"The board believes that the proposed demerger of the group's transactional businesses into a separate listed company will give shareholders the opportunity to benefit from the value in these businesses, which is currently not fully recognized in MXC's net asset value or its share price," MXC Capital Chairman Peter Rigg said.

Should shareholders approve the demerger, all existing shareholders in the group will receive their pro rata allocation of shares in the new firm and its shares will begin trading on TISE.

Meanwhile, MXC Capital's board intends to set up a progressive policy of returning capital to shareholders through periodic tender offers.

The proposed amount for the tender offer for the year ended Aug. 31 will be £1.7 million, equivalent to the group's trading profit for the period, with the amount expected to be paid out in October, subject to shareholder approval. The price for the tender offer will be 116 pence per share, corresponding to the group's NAV per share as of Aug. 31.