FFW creates first online closed dealing market for Radio Taxis Group
13 October 2004
City law firm Field Fisher Waterhouse (FFW) have advised Radio
Taxis Group Limited on its successful demutualisation, private
equity fund raising and listing on ShareMark. This involved the
creation of the UK’s first online closed market for share
dealing.
The 18 month project involved the demutualisation of Radio
Taxis, London’s second largest black cab company, by way of a
conversion from an industrial and provident society to a private
limited company and then the admission of Radio Taxis to trading on
ShareMark.
Due to Financial Services and Markets Act constraints, the
closed market could not be operated by Radio Taxis. It subsequently
approached The Share Centre, who operate ShareMark and specialise
in meeting the needs of small and medium-sized companies requiring
a trading platform for their shares. It wanted to adapt its
existing share trading platform to create the first online closed
dealing market for trading in shares in the UK.
Arrangements were devised to ensure that only those permitted to
hold Radio Taxis shares can buy the shares on ShareMark and that
Radio Taxis would be able to force a sale of shares in the market
in the event that a shareholder ceases to be entitled to hold these
shares.
The project was complicated by the need to balance a number of
often competing objectives which had been set down by the Radio
Taxis board. These included:
- the need to raise private equity capital to fund future
expansion
- the requirement that the existing 1400 members (and not the
investor) have control over the demutualised organisation
- a desire to minimise the number of shareholder meetings
required to approve the project
- the requirement that only those connected with Radio Taxis
could own shares in the organisation going forward
- the need to allow shareholders the opportunity to buy and sell
shares in Radio Taxis.
Negotiations were held with a number of traditional venture
capital houses. However, in the end terms were agreed with the
owner of the Yellow Cab Company in Cleveland, Ohio. Following a two
stage shareholder voting process, the demutualisation and fund
raising was completed in June 2004. Radio Taxis then turned its
attention to the next stage of the project, namely the creation of
a closed market in which only those connected with Radio Taxis
could buy and sell its shares. The listing of Radio Taxis shares
went live on 27 September 2004.
The FFW team was led by corporate partner David Wilkinson and
included partner Edward Millar (Banking) and Caroline Harris
(Corporate).
Geoffrey Riesel, Chairman of Radio Taxis, says:
“We are the only Black Taxi circuit in London to allow both drivers
and staff to become stakeholders. The board and I felt passionate
at the time of demutualisation that it was vital to create a Radio
Taxis for the future that properly protected its drivers and staff
whilst providing the means to finance and grow the company to its
full potential.”
David Wilkinson, corporate partner in FFW, says:
“The project required some creative thinking to adapt the
traditional private equity structure to fit in with the rarely used
laws relating to the demutualisation of industrial and provident
societies. Add to this the work with ShareMark to create the UK’s
first online closed market for share dealing and you have a truly
unique and interesting deal.”
For further press information, please contact:
Ben Girdlestone, Communications Manager, on +44 (0)20
7861 4968
Louise Eckersley, PR Executive, on +44 (0)20 7861 4120