Young's AIM plan seeks simpler share structure

by The PMA Team

London brewer Young's plans to scrap a class of its shares and join the Alternative Investment Market (AIM) ­ a move that some industry experts think could eventually lead to a takeover bid.

The change to its share structure will see 4.1m category-B shares ­ held by the Young family and its trusts and accounting for 57% of votes ­ put into a single voting category with the 3.1m A-shares on AIM. Previously, A-shares were listed on the main market and held 43% of the shares. Also currently listed are 4.8m non-voting C -shares ­ granted in the 1970s to avoid a Labour government tax on dividends.

The proposed move has delighted activist investor Guinness Peat, which holds 10% of the shares. The family-owned shares can easily be traded on AIM, increasing the chances of outside ownership and control of the company. Blake Nixon, of Guinness Peat, said the move to AIM was "beyond what we were hoping to achieve".

"Over time the 57% will come down when a family member wants to fix the roof or something," he added. The simplification of the Young's share structure and the move to AIM will allow the retention of tax advantages enjoyed by B share holders.

Shares on AIM are deemed to be unlisted and avoid inheritance tax penalties. Peter Whitehead, Young's finance director, confirmed that the move to AIM and the share plan were driven by the chance to merge A and B shares ­ and retain tax benefits. The growing reputation of the AIM market was also a factor. "AIM is clearly a successful market where institutions are happy to invest," he told the Financial Times.

Previously, Guinness Peat, which has held shares in Young's for eight years, had come up with a plan for enfranchising the non-voting shares.

An extraordinary meeting will be held on 2 June to approve the Young's proposal. A City analyst said: "The plan certainly makes Young's more vulnerable to outside ownership and control than it has been historically. It also seems to address issues that Guinness Peat have been pressing on for a while."