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Shareholder opposes planned liquidation of Danka Business Services following sale of imaging business
By Lisa Kerner
Charlotte, N.C., June 10 - DCML LLC said the planned liquidation of Danka Business Services plc following the sale of Danka Office Imagining Co. to Konica Minolta is "grossly unfair" to shareholders.
As a result, the 6% shareholder will not support the voluntary liquidation of the company and intends to vote against it at the annual meeting in August.
In a June 9 letter to Danka's board of directors, DCML said the proposed liquidation will leave ordinary shareholders with a "pittance" of $6.5 million - specifically, $0.025 per ordinary share or $0.10 per American Depository Share - while holders of participating shares, or the "Cypress shareholders," would receive "substantially in excess of $100 million."
Danka shareholder Cypress Merchant Banking Partners II LP and some of its affiliates, which collectively hold 29% of the voting rights exercisable at general meetings, have agreed to vote in favor of the acquisition and liquidation, according to a previous news release.
DCML believes that the independent committee of the board erred by recommending that Danka enter liquidation subsequent to the Danka Office Imaging sale and conditioning the sale upon shareholder approval of the liquidation.
The investor wants Danka to consider alternative options for executing the sale of Danka Office Imaging while ensuring the value of a sale is "shared more equitably among all of the company's shareholders."
Danka Business Services, based in St. Petersburg, Fla., provides office imaging equipment, software, support and related services and supplies in the United States.
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