Ultimate Leisure to raise £25m in share issue

Bar operator Ultimate Leisure has announced plans to raise £25m for acquisitions via a conditional share issue.

All 14.8m shares to be released will be taken up near-equally by Ultimate's two largest investors, the Reuben brothers and Dawnay Day, the financial group.

The shares will be issued at 169p, a five per cent discount to the stock's closing price on Friday January 19 2007.

The take up means both investors will each hold more than 30 per cent of Ultimate, the point at which the Takeover Panel requires an offer to be made to all of a group's shareholders.

However the Panel has said it will allow this requirement to lapse on the basis that all of Ultimate's shareholders approve a series of 'whitewash' waivers - where an entity is allowed to assistance to buy its own shares provided it can prove it can pay its debts for the 12 months following such assistance being given - at an forthcoming extraordinary general meeting.

In a statement Ultimate said it would have preferred to invite all of its shareholders to take part in the share issue, but the "costs and complexities involved in producing a prospectus…would be disproportionate to the benefit gained".

Ultimate's chairman Mark Jones said: "We've pretty much repositioned the business and now we're looking to take the group forward to its next stage.

"We're delighted that our major shareholders have demonstrated their confidence in our plans."

Jones said other shareholders can vote against the proposal, but he would be seeking to persuade doubters that the share issue would prove to be the right strategy to pursue.