TIDMCAEL
RNS Number : 0658I
Cazenove Absolute Equity Limited
08 June 2011
Cazenove Absolute Equity Limited
Notice of Annual General Meeting
8 June 2011
Introduction
A circular has been sent to shareholders including notice of an
Annual General Meeting of the Company, to be held at 11.00 a.m. on
24 June 2011 at Trafalgar Court, Les Banques, St Peter Port,
Guernsey GY1 3QL (the "Notice of AGM"). In addition to those
Resolutions that would be considered to be standard business at the
Company's AGM and which are being put to Shareholders in accordance
with the Companies Law, further resolutions will be proposed:
(a) to amend the Company's Investment Policy, to reflect a focus
on Alpha strategies managed by Cazenove Capital such as the
Cazenove UK Dynamic Absolute Return strategy, in accordance with
the Listing Rules (the "Investment Policy Proposal");
(b) subject to the approval of the Investment Policy Proposal,
to approve the continuation of the Company in accordance with the
Company's Articles of Incorporation (the "Continuation
Proposal");
(c) to approve the waiver granted by the Panel of the obligation
that would otherwise arise on Cazenove Capital and Andrew Ross to
make a general offer to the Company's Shareholders pursuant to Rule
9 of the Takeover Code as a result of the exercise by the Company
of its Buyback Authority (the "Waiver Proposal"); and
(d) subject to the approval of the Waiver Proposal, to renew the
Company's authority to make on-market repurchases of its own Shares
in accordance with the Company's Articles of Incorporation (the
"Buyback Proposal"),
together, the "Proposals". The Proposals are subject to
Shareholder approval at the Company's Annual General Meeting, to be
held on 24 June 2011.
The Continuation Proposal
Background
The Company's Articles of Incorporation require that if, over
the twelve months preceding the Company's Accounting Reference
Date, the Shares have traded at an average discount to the
prevailing Net Asset Value in excess of the maximum percentage
specified by the Board, the Company must propose an ordinary
resolution at its next annual general meeting for the continuation
of the Company as an investment company (the "Continuation
Resolution"). For the period to 31 October 2010, the maximum
discount to NAV specified by the Board was 5 per cent.
As announced on 24 February 2011, the Shares traded at an
average discount of greater than 5 per cent. to the Company's Net
Asset Value over the twelve months to 31 October 2010. Accordingly,
the Company is obliged to propose the Continuation Resolution at
the AGM. If the Continuation Resolution is not approved, the
Directors will be required to submit proposals to Shareholders for
the winding-up, reorganisation or reconstruction of the Company.
For the reasons given below, the passing of the Continuation
Resolution at the AGM is conditional on the approval of the
Investment Policy Proposal.
Company performance
In considering the position in relation to the Continuation
Proposal, the Directors have taken into account the Company's
recent performance as well as its longer term performance since
launch.
Since the Company's launch on 31 October 2006, investment
performance recorded NAV accretion of 27.84 per cent. in the period
from launch to 30 April 2011 (versus 18.02 per cent. for the FTSE
All-Share (total return) over the same period). The Company's NAV
appreciation was achieved with relatively low annualised
volatility. Over the same period, the FTSE All-Share achieved its
return with 23.1 per cent. volatility, whilst the Company achieved
a higher level of return with share price volatility of only 10.7
per cent. These figures are based on monthly estimated Net Asset
Values and are unaudited. The Company's Beta relative to the FTSE
All-Share in the period from launch to 31 January 2010 was 0.06 and
correlation to the FTSE All-Share over the same period was
0.14.
During 2010 the Company had its most challenging year since
launch. All the constituent funds of the Company found the early
part of the year problematic, which in large part reflected more
cautious cyclical-risk positioning within the business cycle of the
funds. Investors generally seemed more focused on varying sector
momentum than on divergent company performance within sectors.
However, this began to change in the second half of 2010 and, as a
result, both Cazenove UK Dynamic Absolute Return Fund and Cazenove
European Alpha Absolute Fund (both portfolio companies of the
Company) performed better during the final months of the year.
Despite this late recovery, over the 12 months to 30 April 2011 the
NAV per Share fell from 127.42 pence to 125.94 pence, a fall of
approximately 1.16 per cent. with three underlying funds posting
negative returns and two underlying funds proving Alpha enhancement
and delivering positive returns.
Shareholder consultations
In light of this recent performance, and conscious of the
requirement for the Continuation Resolution, the Board has
undertaken a limited process of Shareholder consultation. This
process sought to gauge Shareholder opinion on various aspects of
the Company including, but not limited to, its strategy,
performance, Share price discount to NAV and the Continuation
Resolution.
As a result of these consultations the Board is of the opinion
that Shareholders are unlikely to support the continuation of the
Company based on its current Investment Policy, being (in summary)
the combination of various business cycle and Alpha strategies to
create an absolute return fund of funds vehicle.
However, the Board is also of the opinion, based on Shareholder
feedback, that support may exist for a continuation of the Company
provided that the current Investment Policy is amended so as to
focus solely on Alpha strategies managed by Cazenove Capital such
as the Cazenove UK Dynamic Absolute Return Fund. By way of example,
this particular underlying fund has delivered annualised returns
since launch of 13.3 per cent. with volatility of 8.0 per cent.
This compares to the FTSE All-Share performance over the same
period of 7.8 per cent. and 15.7 per cent. volatility.
Currently the two funds managed by Cazenove Capital adopting
Alpha strategies are the Cazenove Absolute Dynamic Fund and the
Cazenove UK Dynamic Absolute Return Fund Limited.
The Cazenove Absolute UK Dynamic Fund
The investment objective of the Cazenove Absolute UK Dynamic
Fund (the "UK Dynamic Fund") is to achieve absolute returns through
targeted investment strategies independent of UK market conditions
or indices. The UK Dynamic Fund is a UCITS fund and seeks to
achieve its investment objective by investing in a concentrated
portfolio of companies (usually between 30 to 60 companies both on
the long side and the short side of the portfolio with no single
company representing more than 7.5 per cent. of the fund's assets)
predominantly incorporated in the United Kingdom or in companies
which derive a significant proportion of their revenues or profits
from this country or which are primarily operating in this
jurisdiction. The UK Dynamic Fund can utilise leverage up to a
maximum of 300 per cent. of net assets in order to enhance returns
with a maximum net exposure to the markets of 75 per cent.
Investments are made primarily in companies and other securities
which are constituents of the FTSE All-Share Index with a bias
towards medium sized and smaller companies. The UK Dynamic Fund may
also invest in securities listed on the Alternative Investment
Market and in equity related transferable securities, such as
preferred shares, debentures, warrants (warrants may not exceed
more than 5 per cent of the total assets of the UK Dynamic Fund)
and convertible securities or in derivatives thereof. As the UK
Dynamic Fund has an absolute return objective it will not be
managed against any index.
Whilst the UK Dynamic Fund mainly invests in equities, it may
also invest in debt securities (such as bonds and notes of any
maturity which are transferable securities), where this is deemed
appropriate in the market conditions prevailing at that time. Any
such securities will be rated investment grade by Moody's or
S&P, or if not rated, deemed by the investment manager to have
at least an equivalent rating and will be issued by the UK
government or companies incorporated in the UK or in companies
which derive a predominant proportion of their revenues or profits
from this country or which are principally operating in that
jurisdiction. The UK Dynamic Fund may also invest in short-term
securities which are rated investment grade (such as certificates
of deposit, bankers' acceptances and commercial paper) for
temporary defensive purposes.
The Cazenove UK Dynamic Absolute Return Fund Limited
The investment objective of the Cazenove UK Dynamic Absolute
Return Fund Limited (the "ARF") is to seek to achieve absolute
returns independent of market conditions or indices. The ARF seeks
to achieve its investment objective by investing both long and
short predominantly in or with reference to UK equities and by
operating an absolute return strategy. ARF invests in a
concentrated portfolio (usually between 15 to 40 companies both on
the long and the short side of the portfolio with no single company
representing more than 7.5 per cent. of the fund's assets) and can
utilise leverage up to a maximum of 300 per cent. of net assets in
order to enhance returns with a maximum net exposure to the markets
of 75 per cent.
Investments are primarily to be made in or with reference to
equities listed or traded on markets and exchanges in the United
Kingdom including without limitation the London Stock Exchange, AIM
and OFEX. The ARF does not invest in or with reference to unlisted
U.K. equities. The ARF may also invest in or with reference to
preferred stock, convertibles and bonds. Depending on the current
and expected stock market background and business conditions, the
ARF may invest a significant proportion of its assets outside of
the FTSE 100. The ARF may seek to achieve its investment policy
through investment in or with reference to exchange traded and
other funds and through the use of derivative and other
instruments.
Proposal
Accordingly, the Board is proposing an amendment to the
Company's Investment Policy as set out below. The passing of the
Continuation Resolution at the AGM is conditional on the approval
of the Investment Policy Proposal, with the result that the Company
will not continue unless it has approved the Investment Policy
Resolution.
The Investment Policy Proposal
The investment objective of the Company is to seek to achieve
consistent absolute returns. The Company's existing Investment
Policy is to "seek to achieve its investment objective through a
policy of investing in a portfolio of long/short equity funds" and
to "seek to achieve consistent returns with low levels of
volatility".
The Board believes that it is in the best interests of the
Company and its Shareholders as a whole for the Company's existing
investment objective to remain unchanged but for the key statement
in the current Investment Policy to be amended so as to be:
"The Company will invest in funds managed by Cazenove Capital
following Alpha strategies such as the Cazenove UK Dynamic Absolute
Return Fund Limited, a Cayman domiciled fund, or Cazenove Absolute
UK Dynamic, a UCITS fund or any other such fund managed by Cazenove
Capital Management Limited with an Alpha strategy and with the
flexibility to exploit a wide range of long/short equity investment
opportunities."
The full proposed Investment Policy is set out in the Circular.
In order to comply with the Listing Rules the Investment Policy has
also been updated to reflect the investment limits and restrictions
of the underlying funds referred to above. If Resolution 6 to be
proposed at the AGM is passed, the Company will thereafter adhere
to the investment policy set out in Part II of the Circular. As at
the Latest Practicable Date underlying funds that are not
consistent with the proposed Investment Policy represented
approximately 57 per cent. of the Company's net assets. The Board
therefore believes that the portfolio realignment required as a
consequence of such a change to the Investment Policy would be
completed within three months and that such realignment will not
have a significant negative impact on the Company's performance
during this period.
The new Investment Policy, set out in full in Part II of the
Circular, is subject to Shareholder approval by ordinary resolution
(the "Investment Policy Resolution") at the AGM.
The Buyback Proposal, and proposal for future discretionary
tender offers
Buyback Authority
The Board continues to be determined to take action to reduce
the discount to NAV at which the Company's Shares trade and to
improve liquidity in the Company's Shares. To that end, the Board
has been actively utilising the Company's authority to repurchase
Shares as granted at the Company's last annual general meeting. As
at the Latest Practicable Date the Company had repurchased
8,084,804 Shares in the period from August 2010, equivalent to 13.5
per cent. of the initial issued share capital.
Share buybacks
A special resolution (the "Buyback Resolution") will be proposed
at the AGM seeking to renew the Company's authority to repurchase
its Shares on-market. The Board continues to believe that this
authority is one of several important tools available to it for the
purpose of seeking to reduce the discount to NAV at which the
Company's Shares trade.
The maximum number of Shares that will be authorised to be
purchased pursuant to the Buyback Resolution shall be such number
as shall represent 14.99 per cent. of such Shares in issue
(excluding Shares held in treasury) at the time this resolution is
passed. The minimum price which may be paid for a Share shall be
GBP0.01 and the maximum price which may be paid for a Share shall
be an amount equal to 105 per cent. of the average market values
for a Share taken from and calculated by reference to the London
Stock Exchange's Daily Official List for the five Business Days
immediately preceding the day on which the Share is purchased. The
authority conferred by the Buyback Resolution shall expire at the
earlier of 18 months from the date hereof and the conclusion of the
annual general meeting of the Company to be held in 2012.
Significant repurchases of Shares would increase Cazenove
Capital's aggregate holding of the Company's Voting Rights further
above 30 per cent., and Cazenove Capital would therefore be
required to make a mandatory offer for the remainder of the
Company's Shares in accordance with Rule 9 of the Code.
Accordingly, the Board has applied to the Takeover Panel for a
waiver of Rule 9 under Rule 37 of the Code (as it did in advance of
the Company's last annual general meeting). Further details of this
Waiver are set out below under the heading "The Waiver Proposal".
The passing of the Buyback Resolution at the AGM is conditional
upon the approval of the Waiver Resolution, which is described
below.
Future tender offers
In addition, and subject to Shareholder approval of the
Investment Policy Proposal and the Continuation Proposal, the Board
has resolved to introduce a further discount control mechanism. If,
in any three month period ending 31 January, 30 April, 31 July and
31 October in each year, the average weekly discount to NAV at
which the Shares trade exceeds five per cent., the Board may, in
its absolute discretion, propose a tender offer allowing those
Shareholders on the Share register at the start of the relevant
three month period to tender up to 25 per cent. of their holding at
a tender price equivalent to NAV (as at the date of the tender)
less the costs of the tender offer and less two per cent. Any such
tender will also allow a Shareholder to tender in excess of 25 per
cent of their holding, such excess tender to be satisfied only to
the extent that other Shareholders tender less than their 25 per
cent. entitlement. Shareholders should note that the Company is not
currently seeking authority to make future tender offers.
As noted above, any tender will be subject to the discretion of
the Board, which will take into account various factors when
determining whether or not to propose a tender in respect of the
period in which the average discount limit has been breached. These
factors include, but are not limited to, prevailing market
conditions, liquidity of the underlying fund portfolio, the level
of anticipated tender, the impact of costs of those tendering
Shares and satisfaction of a statutory solvency test.
Each time that a tender is put to Shareholders it will be
necessary for the Board to seek a waiver from the Takeover Panel
and to seek Shareholder authority for the increased buyback
authority and for the further waiver (in the same way and for the
same reasons as described below under the heading "The Waiver
Proposal").
Subject to Shareholder approval of the Investment Policy
Proposal and the Continuation Proposal, it is the Board's intention
that a tender on the above terms be proposed, regardless of the
level of discount, as soon as is practicable after the AGM and that
the first three month period over which the discount would be
assessed for the purposes of a tender offer would then run from 1
November 2011 until 31 January 2012.
If, as a result of tender offers, share buybacks or otherwise,
the Company's aggregate NAV is below GBP20 million for 3
consecutive calendar months, it is the Board's intention to draw up
proposals for the voluntary liquidation of the Company.
The Waiver Proposal
Background
The Company is seeking authority, pursuant to section 315 of the
Companies Law, to make one or more market acquisitions of Shares,
provided that the maximum number of Shares that the Company is
authorised to acquire is 14.99 per cent. of each class of Shares in
issue (excluding Shares held in treasury) at the time the authority
is granted, being at the Annual General Meeting. As discussed
above, if the Company were to exercise the Buyback Authority in
full in respect of the Shares (with Cazenove Capital not
participating), Cazenove Capital's shareholding of 15,815,238
Shares would be unchanged, but would at completion of the exercise
represent 35.91 per cent. of the Company's reduced Issued Share
Capital.
The Takeover Code
As a Guernsey company which has its Shares admitted to trading
on the Main Market of the London Stock Exchange, the Company is
subject to the Code.
Under Rule 9 of the Code, any person who acquires an interest
(as defined in the Code) in shares which, taken together with
shares in which he is already interested in and which persons
acting in concert with him are interested, carry 30 per cent. or
more of the voting rights of a company which is subject to the
Code, is normally required to make a general offer to all the
remaining shareholders to acquire their shares.
Similarly, when any person, together with persons acting in
concert with him, is interested in shares which in aggregate carry
not less than 30 per cent. of the voting rights of such a company,
but does not hold shares carrying more than 50 per cent. of such
voting rights, a general offer will normally be required if any
further interests in shares are acquired by any such person or if
such percentage interest increases by virtue of a reduction in the
number of shares in issue, such as following a buyback.
An offer under Rule 9 of the Code must be made in cash and at
the highest price paid by the person required to make the offer, or
any person acting in concert with him, for any interest in shares
of the company during the 12 months prior to the announcement of
the offer.
Andrew Ross and Cazenove Capital Management Limited (described
below) are deemed to be acting in concert for the purposes of the
Code. Cazenove Capital currently holds 15,815,238 Shares in the
Company (this figure is inclusive of the 66,000 Shares in the
Company held by Andrew Ross who is a non-executive Director of the
Company and the chief executive officer of Cazenove Capital). Such
Shares represent, in aggregate, 30.53 per cent. of the Company's
current Voting Rights. If the Company were to exercise its existing
Buyback Authority in full (with Cazenove Capital not
participating), Cazenove Capital and Andrew Ross would between them
remain interested in 15,815,238 Shares albeit now representing
approximately 35.91 per cent. of the Company's Issued Share
Capital. These figures are based on the assumptions that:
-- Cazenove Capital does not sell any of its Shares between the
date of this Circular and the AGM;
-- the Company exercises the Buyback Authority in full and
Cazenove Capital does not participate by selling any Shares;
and
-- the reduced Issued Share Capital (excluding Shares held in
treasury) following completion of the Share buyback is equivalent
to 44,038,606 Shares.
A table showing the respective individual interests in Shares of
Andrew Ross and Cazenove Capital if the Company's increased buyback
authority were to be exercised in full is set out on page 15 of the
Circular.
The Panel has agreed, however, to waive the obligation to make a
general offer that would otherwise arise as a result of the
exercise in full of the Buyback Authority, subject to the approval
of the Independent Shareholders on a poll. Accordingly, a
resolution (for the approval of the Waiver) is being proposed at
the AGM, and will be taken on a poll (the "Waiver Resolution").
Neither Cazenove Capital nor Andrew Ross will be entitled to vote
on the Waiver Resolution.
Following any exercise in full of the Buyback Authority
following approval of the Buyback Resolution, Andrew Ross and
Cazenove Capital will between them be interested in Shares carrying
30 per cent. or more of the Company's voting Share capital but will
not hold Shares carrying more than 50 per cent. of such voting
rights and (for so long as they continue to be treated as acting in
concert) any further increase in that aggregate interest in Shares
will be subject to the provisions of Rule 9.
Cazenove Capital
Cazenove Capital Management Limited is an independent asset
management company registered in England with company number
03017060 and has its registered address at 12 Moorgate, London,
EC2R 6DA. Currently, Cazenove Capital has GBP15.8 billion worth of
assets under management. Further information on Cazenove Capital is
set out in Part III of the Circular.
Intentions of the Directors
The Directors anticipate that they will continue to seek
authority from the Shareholders on an annual basis to renew the
Buyback Authority and will continue to seek Independent Shareholder
approval of a waiver of any Rule 9 obligation which may otherwise
arise. In addition, and in the event that the Directors determine
to propose a tender offer to Shareholders, they will look to seek
Independent Shareholder approval of a waiver of any Rule 9
obligation that may arise as a consequence of such tender.
Benefits of the Proposals and rationale for continuation of the
Company
The Board believes that the Proposals, coupled with the
continuation of the Company as an investment company and the
Board's intention to make one or more tender offers (as described
above), have the following benefits for Shareholders:
-- the potential for an improvement in absolute performance
through a change in the Investment Policy, resulting in greater
exposure to a more forward looking and successful underlying
strategy;
-- the ability of Shareholders to gain access to the Cazenove
Capital UK Dynamic Absolute Return fund, which has a limited
capacity and therefore to which there may be limited access;
-- the benefit of a blended portfolio of underlying funds
including traditional offshore hedge fund and UCITS structures
providing appropriate liquidity to the Company;
-- the potential for an improvement in the level of discount to
NAV at which the Company's Shares trade as a consequence of the
continued use of the Buyback Authority and the indicated
introduction of further discount control mechanisms, subject to
Board discretion;
-- the ability of Shareholders to tender for cash a significant
portion of their holding of Shares in the event that the Shares
trade on average at a discount in excess of five per cent. over a
three month period, subject to Board discretion; and
-- the avoidance of costs that would otherwise be incurred in
the event that the Continuation Resolution is not approved and the
Board is required to draw up plans for a reconstruction,
reorganisation or winding-up of the Company.
The Board therefore believes that, should the Resolutions be
approved at the AGM, the Company will be well placed to deliver
consistent absolute returns, with low levels of volatility and a
low correlation to the stock market generally, from an experienced
manager with an impressive long term record.
If the Continuation Resolution is not approved by Shareholders,
the Board will draw up proposals for the voluntary liquidation of
the Company and convene an extraordinary general meeting of the
Company (for a date not more than three months after the date of
the AGM) at which Shareholders will have an opportunity to vote on
those proposals. Shareholders who are in any doubt as to the
potential tax consequences of the voluntary liquidation of the
Company are strongly recommended to consult their own advisers
before voting on those proposals.
Risks associated with the Proposals
In considering your decision in relation to the Proposals, you
are referred to the risks set out below.
You should read this Circular carefully and in its entirety and,
if you are in any doubt about the contents of this Circular or the
action you should take, you are recommended to seek immediately
your own personal financial advice from your stockbroker, bank
manager, solicitor, accountant or other independent financial
adviser authorised under the Financial Services and Markets Act
2000.
Only those risks which are material and currently known to the
Company have been disclosed. Additional risks and uncertainties not
currently known to the Company, or that the Company currently deems
to be immaterial, may also have an adverse effect on the
Company.
Risks associated with the change of Investment Policy
-- Following the implementation of the Investment Policy
Proposal, the Company's portfolio will be focussed on Alpha
strategies managed by Cazenove Capital such as the Cazenove UK
Dynamic Absolute Return Fund Limited, a Cayman domiciled fund, or
Cazenove Absolute UK Dynamic, a UCITS fund. While the Board
considers that the Investment Policy Proposal will give the Company
the flexibility to exploit a wide range of long/short equity
investment opportunities, Shareholders should note that it will
also decrease the diversification of the Company's portfolio and,
accordingly, increase the risk of volatility. In addition, an
increased focus on Alpha strategies may reduce the overall
liquidity of the underlying portfolio of investee companies as such
strategies tend to favour smaller companies.
-- Furthermore, the Investment Policy Proposal will result in a
reduction in the number of underlying funds held by the Company and
hence a reduction in the number of key executives at Cazenove
Capital acting in its capacity as manager of the underlying funds
rather than as manager of the Company. Should any of these key
executives leave Cazenove Capital and should Cazenoze Capital not
be able to replace such key executives with individuals of a
similar experience and calibre without delay then this may
adversely affect the performance of the Company.
-- There can be no guarantee that the investment objective of
the Company will be achieved or that any appreciation in the value
of the Company's assets will occur.
-- The Company's past performance is not necessarily an
indication of its future investment performance.
Risks associated with the Buyback Proposal
-- If the Buyback Proposal is implemented and the Company
repurchases Shares pursuant to its authority to buyback Shares, the
number of Shares in issue will be reduced and the Company will
reduce in size. As a result, the fixed costs of the Company will be
spread over fewer Shares. The Company's current investments may
also represent a larger proportion of the Company's portfolio in
future.
Risks associated with the approval of the Waiver Proposal
-- The Independent Shareholders should note that, if the Waiver
Proposal is approved, and, as a result of the exercise by the
Company of the Buyback Authority, Cazenove Capital's shareholding
in the Company increased, Cazenove Capital would be able to
exercise more significant control over the conduct of the
Company.
-- The Independent Shareholders should note that, if the Waiver
Proposal is approved, this does not provide any guarantee that, in
any future situation where Rule 9 and Rule 37 of the Code became
relevant to the Company (whether in relation to Cazenove Capital or
otherwise), the Panel would be similarly willing to grant a
waiver.
Resolutions at the AGM
The Waiver Resolution is subject to the approval of the
Independent Shareholders by ordinary resolution, and will be voted
on a poll. The Continuation Resolution, and the Investment Policy
Resolution will be voted as ordinary resolutions and the Buyback
Resolution will be voted as a special resolution.
The Resolutions to be proposed at the AGM are as follows:
Ordinary Resolutions:
(i) to receive the Annual Report;
(ii) to re-elect Ernst & Young LLP as auditors of the
Company until the conclusion of the Company's next annual general
meeting;
(iii) to authorise the Board to determine the remuneration of
the auditors;
(iv) to re-elect Andrew Ross as a Director of the Company in
accordance with Section 15.2.13AR of the Listing Rules and Article
81.3 of the Articles;
(v) to re-elect Geoffrey Marson as a Director of the Company
following his retirement by rotation in accordance with Articles 81
and 82 of the Articles;
(vi) approve the Investment Policy Resolution;
(vii) subject to the approval of the Investment Policy
Resolution, to approve the Continuation Resolution;
(viii) to approve the Waiver Resolution; and
Special Resolution
(ix) subject to the approval of the Waiver Resolution, to
authorise the Company to make market repurchases of its own Shares,
with such repurchases limited to 14.99 per cent. of the Shares in
issue (excluding Shares held in treasury) at the time the
resolution is passed.
All persons (except as described below) holding Shares at 11
a.m. on 22 June 2011, or if the AGM is adjourned, on the register
of Shareholders of the Company 48 hours before the time of any
adjourned AGM, shall be entitled to attend or vote at the AGM and
shall be entitled to one vote per Share held.
Under Rule 5 of the Code, Cazenove Capital and Andrew Ross are
not permitted to vote on the Waiver Resolution. Only the
Independent Shareholders (being all of the Shareholders except for
Cazenove Capital and Andrew Ross) will be entitled to vote on the
Waiver Resolution. Cazenove Capital will not be voting its
shareholding of 15,749,238 Shares, representing 30.40 per cent. of
the current Voting Rights, in respect of the Waiver Resolution. In
addition, Andrew Ross will not be voting his shareholding of 66,000
Shares (representing approximately 0.13 per cent. of the current
Voting Rights) in respect of the Waiver Resolution and he has not
participated in the Board's consideration of the Waiver
Proposal.
A quorum consisting of two Shareholders present in person or by
proxy and being entitled to vote is required for the AGM.
In order for the ordinary Resolutions set out above (with the
exception of the Waiver Resolution) to be passed, they must be
approved by more than 50 per cent. of Shareholders present and
voting at the AGM in person or by proxy. In order for the Waiver
Resolution to be passed it must be approved on a poll by more than
50 per cent. of the Independent Shareholders present and voting at
the AGM in person or by proxy. In order for the special Resolution
(for the approval of the Buyback Proposal) to be passed it must be
approved by not less than 75 per cent. of Shareholders present and
voting at the AGM in person or by proxy.
The approval of the Continuation Resolution is conditional upon
the approval of the Investment Policy Proposal. The approval of the
Buyback Proposal is conditional on the approval of the Waiver
Proposal.
Recommendation
The Waiver Resolution
The Independent Directors, who have been so advised by Numis
Securities, consider the Waiver Resolution to be fair and
reasonable and in the best interests of the Independent
Shareholders and the Company as a whole. In providing advice to the
Independent Directors, Numis Securities has taken account of the
commercial assessments of the Independent Directors. Accordingly,
the Independent Directors unanimously recommend that the
Independent Shareholders vote in favour of the Waiver Resolution,
at the AGM, as they intend to do in respect of their own beneficial
shareholdings of 20,000 Shares, representing 0.03 per cent. of the
current Voting Rights.
The remainder of the Resolutions
The Board as a whole considers all of the resolutions being
proposed at the AGM (including the Investment Policy Resolution,
the Continuation Resolution and the Buyback Resolution but not the
Waiver Resolution which is dealt with above (the "Remaining
Resolutions")) to be in the best interests of the Company and of
Shareholders taken as a whole. Accordingly, the Board unanimously
recommends that you vote in favour of the Remaining Resolutions at
the AGM, as they intend to do in respect of their own beneficial
shareholdings of 86,000 Shares, representing 0.17 per cent. of the
current Voting Rights.
Expected timetable
Latest time and date for receipt of Forms 11.00 a.m. on 22
of Proxy June 2011
Annual General Meeting 11.00 a.m. on 24
June 2011
For further information please contact:
Cazenove Capital Management
Robin Minter-Kemp
020 7155 5600
Numis Securities
David Benda, Corporate Broking
020 7260 1275
The information in this announcement should be read in
conjunction with the full text of the circular to shareholders
dated 7 June 2011 (the "Circular"). Capitalised terms used in this
announcement shall, unless the context otherwise requires, bear the
meaning given to them in the Circular.
A copy of the Circular has been submitted to the National
Storage Mechanism and will shortly be available for inspection at
www.hemscott.com/nsm.do
This information is provided by RNS
The company news service from the London Stock Exchange
END
NOADKFDDFBKKAAK
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