TIDMPOLR
RNS Number : 0101S
Polar Capital Holdings PLC
11 November 2021
Polar Capital Holdings plc
11 November 2021
Crystallisation of Business Units and Issue of Shares
Polar Capital Holdings plc ("Polar Capital" or the "Company")
announces the crystallisation of two sets of Preference Shares. One
set is held by Dr Daniel Mahony, David Pinniger and Gareth Powell,
portfolio managers of the Polar Capital Healthcare Team, in respect
of the Polar Capital Biotechnology Fund. The second set is held by
David Keetley, the lead manager of the Global Convertible Bond
Fund.
These crystallisations are expected to be immediately earnings
enhancing for shareholders. Based on the results for the financial
year ended 31 March 2021, the combined impact of the
crystallisation would have been an earnings enhancement of around
2.2p per share(1) .
Background
As set out at the time of the Company's admission to AIM, Polar
Capital has structured its fund management operations in such a way
that the fund management teams are placed in separate business
units. Each business unit is a separate profit centre and the fund
managers responsible receive each year a payment which comprises a
share of their unit's core operating profit (operating profit
before performance fees and related distributions) and performance
fees.
In addition to the remuneration structure described above,
certain fund managers and their teams are offered the prospect of
an interest in the capital of the Company through the purchase of
an individual class of preference shares in Polar Capital Partners
Limited, a wholly owned subsidiary of the Company. These preference
shares have been structured in such a way as to become convertible
upon the occurrence of certain events, known as crystallisation
events, into cash or, at the option of the Company, ordinary shares
at a ratio that is intended to be earnings enhancing for the Group.
At the election of the holders of the preference shares, they may
crystallise all or part of their preference shares, or retain the
balance, if any, for a further crystallising event at a subsequent
date.
From the effective date of crystallisation, the fund managers
concerned cease to be eligible to receive their share (or the
relevant proportion in the case of a partial crystallisation) of
the business unit's core operating profit which has been
crystallised and simultaneously going forward will receive a
reduced interest in their performance fees.
Biotechnology Fund unit
Dr Daniel Mahony, Gareth Powell and David Pinniger have elected
to crystallise in full their preference shares in relation to this
Fund.
Global Convertible Bond Fund unit
Mr David Keetley has elected to crystallise two-third of his
preference shares in relation to this Fund.
Under the terms of the preference shares the crystallisation
value is calculated as at 31 March 2021 and either satisfied in
cash, or at the option of the Company, by issue of new ordinary
shares. The Company has elected to satisfy the consideration for
both crystallisations by the issue of new ordinary shares.
Both crystallisations are in relation to the crystallisation
period ended 31 March 2021. The initial crystallisation value in
respect of the Biotechnology Fund unit is to be satisfied by the
issue of up to 1,037,152 new ordinary shares, and the initial
crystallisation value in respect of the partial crystallisation of
the Global Convertible Fund unit is to be satisfied by the issue of
up to 313,362 new ordinary shares. The new ordinary shares will be
issued in tranches as described below.
The crystallisation value is re-calculated at each of the first,
second, and third anniversaries of 31 March 2021, based on the
profits of the business unit in the 12 months ended on the
respective anniversary. If the result of the re-calculation
provides for a smaller cash or share consideration, then the
amounts paid or shares issued to the owners of the preference
shares are adjusted accordingly. The effect of such re-calculation
is to adjust downwards any consideration and there can never be an
increase in the crystallisation value. In return for this delivery
of new ordinary shares, the Healthcare and convertible bond team
will be forfeiting their interests (or the relevant proportion in
the case of a partial crystallisation) in their core operating
profit in relation to the Polar Capital Biotechnology Fund and the
Global Convertible Bond Fund respectively for the financial year
ended 31 March 2021.
Under the terms of the preference shares 10 percent of the new
ordinary shares are issued immediately with the balance of 30
percent of the new ordinary shares due (subject to the
re-calculation described above) on or as soon as practicable after
each crystallisation anniversary.
As a result, the Company will issue a total of 135,052 (the
initial 10%) new ordinary shares in respect of these
crystallisations. The new ordinary shares will rank pari passu with
the Company's existing ordinary shares at the time of issue.
The Company's current issued share capital is 100,113,855
ordinary shares and following admission of the new ordinary shares
the total ordinary shares in issue will be 100,248,907.
(Note 1) Presented for illustrative purposes based on the year
end results for 31 March 2021 and assuming the crystallisation
occurred as at 31 March 2021.
For further information please contact:
Polar Capital +44 (0)20 7227 2700
Gavin Rochussen (Chief Executive)
Samir Ayub (Finance Director)
Numis Securities Limited - Nomad and Joint Broker +44 (0)20 7260 1000
Charles Farquhar
Stephen Westgate
Kevin Cruickshank (QE)
Peel Hunt LLP - Joint Broker +44 (0)20 3597 8680
Andrew Buchanan
Rishi Shah
Camarco +44 (0)20 7757 4995
Ed Gascoigne-Pees
Monique Perks
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END
MSCBRBDBISBDGBG
(END) Dow Jones Newswires
November 11, 2021 02:00 ET (07:00 GMT)
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