Mellon HBV Alternative Strategies has challenged the offer made by Latium Holdings for Ultraframe, saying it prefers a recapitalization of the company.
Mellon HBV, a registered investment adviser and a subsidiary of Mellon Financial Corporation, owns approximately 11.65% of Ultraframe's issued share capital. In a letter dated 8 June, Mellon HBV informed the board of Ultraframe that in its view the recommended 30p offer by Latium Holdings Limited undervalues Ultraframe.
To this end Mellon HBV does not intend to accept the Latium offer but would, subject to due diligence, support a recapitalisation of Ultraframe by underwriting a rights issue and assisting Ultraframe to secure new long term bank facilities.
In its letter to the board, Mellon HBV informed Ultraframe that it believes greater value can be created through alternative proposals.
In particular, Mellon HBV says it would be willing to support the following Recapitalisation Proposal:
Ultraframe shareholders who wish to support the Recapitalisation Proposal could take up their rights. Alternatively, the nil paid rights could be sold and/or existing positions in Ultraframe could be realised through the open market.
Mellon HBV says it is making this announcement in order to enable full and open discussion to be held with Ultraframe and other investors in relation to the Recapitalisation Proposal.
To further develop the Recapitalisation Proposal, Mellon HBV would like to carry out limited due diligence into the Company's business and has asked Ultraframe for the information that was provided to Latium. Mellon HBV would of course be prepared to sign a confidentiality agreement in order to receive this information.
Mellon HBV has taken legal advice and understands that the Recapitalisation Proposal will likely involve, in summary, the following:
Mellon HBV says it would welcome the opportunity to meet with the board of Ultraframe and NM Rothschild to discuss the Restructuring Proposal or indeed any other proposals that might create additional value for Ultraframe investors.