[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Wednesday, 12 January, 2005, 11:27 GMT
MMO2 offers small investor buyout
Woman using MMO2 service
MMO2 hopes its offer to small shareholders will be attractive
More than one million small investors in UK mobile phone group MMO2 are to be offered a cash buyout in a plan to reduce its fragmented shareholder base.

As part of the proposed corporate restructuring the firm will also be renaming itself O2.

The company will delist as MMO2 on 11 March, and relist as O2 on 14 March.

It is offering investors either new shares in O2 on a one-for-one basis or a cash alternative, funded by placing up to about 300 million new O2 shares.

'Significant cost'

At the end of last year MMO2 had 1.04 million shareholders owning between 1 and 600 shares, representing 63% of shareholders by number but only 3.5% of issued share capital.

The firm said this was a legacy of the firm's demerger from BT in 2001, but that "the cost of servicing such a large number of shareholders is significant".

O2 shop

It said in some cases it costs more to send dividend cheques to the small shareholders than the value of dividends they receive.

For that reason it is offering a deal for small shareholders who want to cash in their MMO2 shares.

For each MMO2 share, it is offering the value of a new O2 share at close on their first day of trading, plus an extra 5 pence.

Spring clean

The firm is guaranteeing that the price paid will amount to a minimum of 105 pence a share, including the extra 5 pence. It is also offering a free brokering service for those who want to sell.

"The board has 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," the company said in a statement.

Those who take no action will have deemed to have chosen the cash option.

The company said it also planned to delist from the New York Stock Exchange as it has no business operations in the US. The US listing is another legacy of its demerger from BT.


FROM OTHER NEWS SITES:
The Scotsman Investor buy-out in post at mm02 - 23 hrs ago
IHT A shift at Motorola - 32 hrs ago
TelegraphMmO2 moves to buy out its minnow shareholders - 34 hrs ago
Sky News MmO2 Offers Cash To Investors - 46 hrs ago
Reuters UPDATE 1-MmO2 offers small investors buyout in restructuring - 52 hrs ago
* Requires registration
The BBC is not responsible for the content of external internet sites


SEE ALSO:
MMO2 looking to 3G as sales grow
17 Nov 04 |  Business
MMO2 lifts revenue target for UK
30 Sep 04 |  Business
MMO2 defends cautious 3G approach
28 Sep 04 |  Business
UK growth propels MMO2 revenues
21 Jul 04 |  Business
MMO2 sees first full-year profit
18 May 04 |  Business
First profit for mobile firm MMO2
17 Nov 03 |  Business


RELATED INTERNET LINKS:
The BBC is not responsible for the content of external internet sites


PRODUCTS AND SERVICES

News Front Page | Africa | Americas | Asia-Pacific | Europe | Middle East | South Asia
UK | Business | Entertainment | Science/Nature | Technology | Health
Have Your Say | In Pictures | Week at a Glance | Country Profiles | In Depth | Programmes
Americas Africa Europe Middle East South Asia Asia Pacific