LiveTiles Limited (ASX:LVT) (LiveTiles or the Company), has submitted a formal request to the Australian Securities Exchange (ASX) to be removed from the official list of the ASX (Official List) pursuant to ASX Listing Rule 17.11 (Delisting). This formal request follows the receipt of in-principle approval from ASX in relation to the proposed Delisting, subject to the satisfaction of the conditions set out below. The Delisting would mean that the Company’s shares would no longer be quoted onthe ASX. The Delisting will be put forward for shareholder approval at a general meeting to be held on or around 5 September 2022.The Delisting is considered by the Company’s Board (Board) to be in the best interests of the Company for a number of reasons, including underperformance of the trading price of the Company’s shares,relatively low levels of trading liquidity and a number of flow on consequences which are set out below. These factors, as well as the costs and administrative burden of remaining listed on ASX, outweigh the benefits associated with remaining listed.Reasons for seeking removal from the Official ListThe Company’s reason for seeking removal from the Official List is that the Directors believe that the Company and its shareholders do not benefit from being publicly listed for the following reasonsa) Company valuation: The Board considers that the trading price of the Company’s shares in recent years implies a valuation that has been (and remains) consistently and materially lower than the valuations of unlisted companies of a comparable nature and stage to LiveTiles. The Board is confident that the Company’s valuation has a greater prospect ofgrowing towards the Board’s assessment of fair value as an unlisted company. In addition, the Company’s undervalued share price has flow on consequences as set out in paragraphs (b) to (d) below.(b) Capital raising: Whilst LiveTiles is well funded and has no intention to raise equity capital in the near term, if the Company seeks to raise further growth capital in the future whilst listed on ASX, this would likely impose a higher dilutionary cost on non-participating shareholders than if the Company was more fairly valued. The Board also considers that the Company will have access to a much broader universe of technology-focused, global institutional investors as an unlisted company including those who are unable to invest in ASX-listed companies due to investment mandates.(c) Strategic and corporate opportunities: The Board considers that the Company will have greater flexibility to pursue and execute value enhancing strategic opportunities and corporate transactions as an unlisted company.(d) Employees: The volatility in the Company’s share price and (in the Board’s opinion) the disconnect between the Company’s share price and its fair value have impacted theCompany’s ability to attract high quality employees. Delisting may improve the Company’sperception as a more attractive employer and promote employee retention, given thePage 1impact share price and illiquidity can have on an employee’s decision to join or remain at the Company and any incentive arrangements. Attracting and retaining employees would assist the Company in delivering its Product Strategy and drive incremental sales growth (see paragraph (f) below).(e) Illiquidity: Notwithstanding the Company’s ASX listing, trading in the Company’s shares has been relatively illiquid which has contributed to high volatility in the Company’s share price. Low liquidity has also limited the Company’s ability to secure broad institutional ownershipFurther, low trading liquidity and the associated volatility has the potential to adversely impact capital markets transactions.(f) Product strategy: The Company has an opportunity to rationalise and reposition its portfolio of software products (some of which have been acquired) to drive incremental sales growth and strategic value over the medium term. The Board believes that pursuing this strategy whilst under the pressure of quarterly financial reporting cycles may lead to increasedvolatility in the Company’s share price.(g) Costs:TheCompanybelievesthattheongoingadministrative,complianceanddirectcosts associated with the Company’s ASX listing are disproportionate to the benefits of remaininglisted.Consequences for the Company and its shareholdersSome of the key consequences for the Company and its shareholders if the Company is removed from the Official List include:the Company’s shares will no longer be quoted on the ASX and will no longer be traded on the ASX;the Company’s shares will only be capable of sale via off-market private transactions which will require the Company’s shareholders to identify and agree terms with potential purchasers of the Company’s shares in accordance with the Company’s Constitution and the Corporations Act 2001 (Cth) (Corporations Act);as an unlisted public company, the Company will no longer be able to raise capital from the issue of securities to the public by means of limited disclosure fundraising documents;for as long as the Company has at least 50 members the Company will remain subject to the“takeovers” provisions of the Corporations Act;for as long as the Company has at least 100 members, it will be classed as an “unlisted disclosing entity” under the Corporations Act and therefore be subject to the “continuous disclosure”obligations in section 675 of the Corporations Act which are substantively the same as those imposed under section 674 of the Corporations Act and ASX Listing Rule 3.1. The Company will still provide disclosure to shareholders of material matters in accordance with the CorporationsAct on the Company’s website. The Company will also continue to lodge annual and interim financial statements (audited and auditor-reviewed, respectively) in accordance with the Corporations Act;a reduction of obligations associated with a listing on ASX, which may include relief from some reporting and disclosure requirements, removal of restrictions on the issue of shares by the Company and requirements concerning significant changes to the Company’s activities;Page 2the ASX Listing Rules and ASX Corporate Governance Principles and Recommendations will no longer be applicable to the Company. The Company will still be governed by the Corporations Act; andthe Company’s Constitution and, therefore, shareholders’ rights will remain unchangedimmediately following the Delisting, such that shareholders will continue to have the right to receive notices of meetings and other notices issued by the Company;o exercise voting rights attached to shares; ando receive dividends payable by the Company from time to time.Conditions and proposed timetableASX's in-principle decision to approve the Delisting is subject to LiveTiles' compliance with the following conditions:The Company’s removal from the Official List is approved by a special resolution of ordinarysecurity holders of the Company.The notice of meeting seeking shareholder approval for the Company’s removal from the OfficialList must include, in a form and substance satisfactory to ASX, the following a timetable of key dates, including the time and date at which the Company will be removed from the Official List if that approval is given;o a statement to the effect that the removal will not take place any earlier than one month after shareholder approval is obtained;o a statement to the effect that if shareholders wish to sell their shares on ASX, they will need to do so before the Company is removed from the Official List, and if they do not, details of the processes that will exist after the Company is removed from the Official List to allow shareholders to dispose of their holdings and how they can access those processes; ando the information prescribed in section 2.11 of ASX Guidance Note 33.• The Company releasing the full terms of ASX’s decision to the market immediately upon submission of its formal Delisting request (this announcement satisfies this requirement and sets out the terms of ASX’s decision).Further details relating to the proposed removal from the Official List will be included in the Noticeof Meeting which will be despatched to the Company’s shareholders in due course.The proposed timetable for the satisfaction of conditions and the expected date of removal of the Company from the Official List are as follows:EventIndicative date*Notice of Meeting seeking shareholder approval of the Delisting to be sent to shareholdersFriday, 5 August 2022
LVT Price at posting:
5.9¢ Sentiment: Hold Disclosure: Held
a) Company valuation: The Board considers that the trading price of the Company’s shares in recent years implies a valuation that has been (and remains) consistently and materially lower than the valuations of unlisted companies of a comparable nature and stage to LiveTiles. The Board is confident that the Company’s valuation has a greater prospect ofgrowing towards the Board’s assessment of fair value as an unlisted company. In addition, the Company’s undervalued share price has flow on consequences as set out in paragraphs (b) to (d) below.(b) Capital raising: Whilst LiveTiles is well funded and has no intention to raise equity capital in the near term, if the Company seeks to raise further growth capital in the future whilst listed on ASX, this would likely impose a higher dilutionary cost on non-participating shareholders than if the Company was more fairly valued. The Board also considers that the Company will have access to a much broader universe of technology-focused, global institutional investors as an unlisted company including those who are unable to invest in ASX-listed companies due to investment mandates.(c) Strategic and corporate opportunities: The Board considers that the Company will have greater flexibility to pursue and execute value enhancing strategic opportunities and corporate transactions as an unlisted company.(d) Employees: The volatility in the Company’s share price and (in the Board’s opinion) the disconnect between the Company’s share price and its fair value have impacted theCompany’s ability to attract high quality employees. Delisting may improve the Company’sperception as a more attractive employer and promote employee retention, given thePage 1impact share price and illiquidity can have on an employee’s decision to join or remain at the Company and any incentive arrangements. Attracting and retaining employees would assist the Company in delivering its Product Strategy and drive incremental sales growth (see paragraph (f) below).(e) Illiquidity: Notwithstanding the Company’s ASX listing, trading in the Company’s shares has been relatively illiquid which has contributed to high volatility in the Company’s share price. Low liquidity has also limited the Company’s ability to secure broad institutional ownershipFurther, low trading liquidity and the associated volatility has the potential to adversely impact capital markets transactions.(f) Product strategy: The Company has an opportunity to rationalise and reposition its portfolio of software products (some of which have been acquired) to drive incremental sales growth and strategic value over the medium term. The Board believes that pursuing this strategy whilst under the pressure of quarterly financial reporting cycles may lead to increasedvolatility in the Company’s share price.(g) Costs:TheCompanybelievesthattheongoingadministrative,complianceanddirectcosts associated with the Company’s ASX listing are disproportionate to the benefits of remaininglisted.Consequences for the Company and its shareholdersSome of the key consequences for the Company and its shareholders if the Company is removed from the Official List include:the Company’s shares will no longer be quoted on the ASX and will no longer be traded on the ASX;the Company’s shares will only be capable of sale via off-market private transactions which will require the Company’s shareholders to identify and agree terms with potential purchasers of the Company’s shares in accordance with the Company’s Constitution and the Corporations Act 2001 (Cth) (Corporations Act);as an unlisted public company, the Company will no longer be able to raise capital from the issue of securities to the public by means of limited disclosure fundraising documents;for as long as the Company has at least 50 members the Company will remain subject to the“takeovers” provisions of the Corporations Act;for as long as the Company has at least 100 members, it will be classed as an “unlisted disclosing entity” under the Corporations Act and therefore be subject to the “continuous disclosure”obligations in section 675 of the Corporations Act which are substantively the same as those imposed under section 674 of the Corporations Act and ASX Listing Rule 3.1. The Company will still provide disclosure to shareholders of material matters in accordance with the CorporationsAct on the Company’s website. The Company will also continue to lodge annual and interim financial statements (audited and auditor-reviewed, respectively) in accordance with the Corporations Act;a reduction of obligations associated with a listing on ASX, which may include relief from some reporting and disclosure requirements, removal of restrictions on the issue of shares by the Company and requirements concerning significant changes to the Company’s activities;Page 2the ASX Listing Rules and ASX Corporate Governance Principles and Recommendations will no longer be applicable to the Company. The Company will still be governed by the Corporations Act; andthe Company’s Constitution and, therefore, shareholders’ rights will remain unchangedimmediately following the Delisting, such that shareholders will continue to have the right to
(20min delay)