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Passage of the reconstruction proposals at the shareholders’ meeting called by Wordplex Plc for June 15 is by no means assured, despite the fact that the company’s bankers say they will pull the plug if the rights issue cash is not forthcoming. Chase Manhattan Securities has acquired 20% of the Wordplex equity at market prices for its clients over the past few months and is passionately indignant that the terms of the rights issue allow Close Investment Management Ltd to acquire 25% of the diluted equity for its clients at the deep discount rights issue price of 50 pence a share, against a price in the market of 110 pence or so. There is a widespread feeling among those who have studied the company that its maintenance business is an unsung gold mine, and there is a broad consensus that the deep discount price for the rights issue is unnecessary – 85 pence a share is felt to represent a reasonable discount. Chase Manhattan is also critical of the fact that Wordplex received an acquisition offer a few weeks back that was rejected without being put to shareholders; then managing director John Cross wanted to accept the offer, which is believed to be the reason he is departing. Chase Manhattan is also ready to call the bluff of the company’s bankers by saying that it is prepared to underwrite the rights issue.

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