The independent directors of Dragon Ukrainian Properties and Development Plc (DUPD, the Isle of Man) Mark Iwashko and Aloysius Wilhelmus Johannes van der Heijden) have revised their position and now they believe that shareholders in DUPD should now accept the offer of Dragon Capital Investments Limited (DCI) to purchase shares.

According to a statement of the independent directors on the London Stock Exchange (LSE), the directors recognise that DCI is now a controlling shareholder (59.31%) and will have significant power and influence over the company.

The independent directors said that without recourse to other DUPD shareholders, DCI will be in a position to propose and pass any ordinary resolution at a general meeting of the Company, allowing it to determine the membership of the board of directors and, through board appointments, potentially the strategy and operation of the company, as well as the company's policy on future dividend payments.

"It is possible that DCI's view on DUPD's strategy and investment policies may differ from the board's and DCI's priorities in relation to DUPD may be at variance with other DUPD shareholders who, even acting collectively, will have limited scope for influencing the affairs of the company by the exercise of their voting rights," they said.

They said that in the event that DCI acquires or agrees to acquire, by virtue of its shareholding and acceptances of the offer, issued share capital carrying 75% or more of the voting rights of DUPD shares, DCI will procure that DUPD applies for the cancellation of trading in DUPD shares on AIM.

Iwashko and van der Heijden said that DUPD's shares, as currently traded on LSE AIM, are relatively illiquid. In view of the acceptances of the offer received to date and possibly with other large DUPD shareholders who may not accept the offer the independent directors believe that in the event of the company continuing to be admitted to trading on AIM, the marketability and liquidity of DUPD shares will be further adversely impacted.

They said that there is no guarantee that DUPD shareholders who do not accept the offer will have another opportunity to sell at or above the current offer price in the near future, or at all. The large concentration of DUPD shares among a small number of shareholders will also make DUPD shares less attractive to new potential investors.

"Furthermore, the independent directors do not believe that there is likely to be any alternative competing offer for the company within a reasonable period of time," DUPD said.

Since the announcement on May 30, 2017 of DCI's mandatory offer for the company, neither the independent directors, nor Panmure Gordon, the company's financial advisor, have been approached by any person on behalf of any other bona fide potential offeror wishing to instigate discussions with a view to making a competing offer for DUPD.

The independent directors, having been advised by the company's financial adviser, Panmure Gordon, remain of the view that the financial terms of the offer significantly undervalue the company and its prospects.

CBRE Ukraine (Expandia LLC) has been engaged by DUPD to provide the following opinion. CBRE Ukraine said that there were no considerable changes in the value of the DUPD property portfolio in H1 2017 compared to valuation made by DTZ Kiev BV as of December 31, 2016. CBRE Ukraine's valuation did not take into account around $4 million from apartment sales in January-June 2017, and a valuation on the land known as Avenue Shopping Center which DUPD owns 18.77%. As there is a high risk that the land lease will not be renewed, the Independent Directors have decided to carry the property at a valuation of nil.