The board of UK-based SaaS construction collaboration technology vendor Asite is looking to take the company private, according to an announcement to the London Stock Exchange this morning. The resolution to de-list will be put to a general meeting in London on 20 April 2009, and, subject to shareholder approval, the de-listing will be effective from 28 April 2009.
The move will benefit Asite through substantial administrative cost savings resulting from no longer being listed, and reduced internal administrative costs. Asite will also seek to re-register the company as a private limited company, and to undertake a capital reorganisation. Asite chairman Walter Goldsmith comments:
“Like the rest of the UK economy, the Group is operating in challenging economic times. The proposal to delist, which is unanimously recommended to Shareholders by the Board, has been assessed against this background. Notwithstanding, this represents an opportunity for the Group to redeploy overhead and professional costs into business and product development, thereby further consolidating our position. We intend to build on the success of the growth we have experienced over the past two years to create the pre-eminent supplier of collaboration and procurement solutions to the UK construction and associated sectors and in doing so to create an acceptable return for Shareholders.”
Asite shares have been trading at 1.875p for the past couple of months, but with very little volume traded – which is probably why this morning’s announcement has yet to have any discernible impact on the price. Asite has made steady progress in the past couple of years towards profitability (see Asite continues ascent) but the current savage construction downturn will, no doubt, have prompted a renewed focus on trimming costs.
Stock Exchange compliance costs can be significant and in some markets (notably the US where the 2002 Sarbanes-Oxley Act imposed stringent requirements) some firms have de-listed so they no longer have to pay the costs of regulation. De-listing can also arise when businesses are acquired, or when they are no longer solvent and so can’t afford to pay the listing fees.
Update (30 March 2009): Whoops, I spoke too soon about the Asite share-price. It closed on Friday at 1.625p.
Update (2 April 2009): Share price closed yesterday (Wednesday 1 April) down a further 0.38p to 1.25p.