CPE Charter Euro.

 
TIDMCPE 
 
Midas Investment Management Limited 
 
Response to the announcement of 28 September 2011 - Charter European Trust plc 
 
Midas Investment Management Limited ("Midas") has 5,605,745 shares in Charter 
European Trust plc ("CPE" or the "Company") under its management, representing 
25.37 per cent of the issued share capital of the Company. 
 
Midas notes the announcement released by the board of CPE on Wednesday 28 
September 2011 and would make the following points in relation to the 
announcement: 
 
 1. Midas will not support any proposals whilst the inequitable voting scheme 
    associated with the Company's share saving scheme operated through Alliance 
    Trust Savings Limited ("ATS") remains in place. Midas have explained in 
    their announcement dated 21 September 2011 that by virtue of the scaling up 
    provisions of that scheme it is possible for a small number of 
    participators in that scheme to have a disproportionate say in the outcome 
    of the reconstruction proposals. It is therefore only sensible, logical and 
    by any test right to remove the risk of the above occurring before putting 
    any mooted reconstruction to shareholders; 
 
 2. Midas believes that the board of CPE could readily have managed the Company 
    in a more proactive way, the Company's cost base has been relatively high 
    (TER of 2.1%¹ versus the Europe sector average of 1.28%²) and there is no 
    obvious need for five directors for such a small trust (Net Assets of GBP 
    43.86m as at 30 September 2011³**); 
 
 3. The Board have not given any indication of what costs the reconstruction 
    scheme would entail but due to the Board's previous performance on cost 
    control we are concerned that this reconstruction may not be undertaken to 
    ensure minimal costs and that will not benefit shareholders; and 
 
 4. Midas has concerns regarding the balance of any circular that "reluctantly" 
    includes Manchester & London Investment Trust plc ("MLIT"). 
 
In conclusion, Midas feels that the Board's formation needs to be reconsidered 
and new directors should be appointed who will deliver any reconstruction 
scheme in a cost effective and balanced way. 
 
Midas does not wish to frustrate shareholders' wishes to exit CPE via cash and/ 
or a choice of rollover vehicles between MLIT and Jupiter European Fund. 
Therefore, it believes that the best way forward will be to consider the 
requisition of an Extraordinary General Meeting to put resolutions to 
shareholders along the following lines: 
 
Special Resolutions 
 
 1. That the directors are directed and required to take all steps immediately 
    following the passing of this resolution to ensure that (a) the 
    arrangements in place between the Company and Alliance Trust Savings 
    Limited relating to share plans, savings schemes and/or related matters 
    (the "Schemes") in respect of the Company's share capital are amended as a 
    matter of urgency with the result that such arrangements no longer provide 
    for or entitle the registered shareholder under the Schemes to exercise any 
    votes on behalf of participants in the Schemes unless such participants 
    have given specific instructions to Alliance Trust Savings Limited (or the 
    relevant nominee) as to how the votes attached the relevant shares should 
    be cast in respect of a particular resolution; and (b) to the extent not 
    already provided for by (a) of this resolution, the provisions in the share 
    savings scheme operated on the Company's behalf by Alliance Trust Savings 
    Limited be amended so that (i) they provide for the exercise of voting 
    rights only in accordance with the specific instructions of participants in 
    the scheme; and (ii) any scaling-up voting provisions contained therein are 
    abolished and of no further effect; and (c) the Company announces as soon 
    as the changes under (a) and (b) have been implemented; 
 
 2. To remove the current directors apart from Giles Weaver; 
 
 3. To appoint a representative of Midas to the board of directors of the 
    Company; and 
 
 4. To appoint a representative of Jupiter European Fund, or its associated 
    companies, to the board of directors of the Company. 
 
 5. That (contingent upon resolutions 1, 2, 3 and 4 being passed) the directors 
    undertake a scheme of reconstruction which would result in the liquidation 
    of the Company and offer shareholders the choice of a rollover into 
    Manchester & London Investment Trust plc ("MLIT"), and/or a rollover into 
    Jupiter European Fund ("Jupiter"), and/or an exit via cash. Elections can 
    be made between the three options in any proportion shareholders should 
    choose, with the default option being a 50:50 split between MLIT and 
    Jupiter. 
 
In conclusion, Midas felt that a member representing the current Board, Jupiter 
and Midas could drive through proposals whereby shareholders could get 
everything we believe they want, with a balanced circular drawn up in a cost 
efficient manner. 
 
Jupiter have declined to comment on the opportunity to put forward a 
representative under resolution 4 above. However, we make it very clear we will 
NOT support the proposals announced by the Board on 28 September 2011 if put to 
shareholders. 
 
It therefore appears that the parties have currently come to an impasse and we 
suggest that the best way to break this impasse and perhaps move matters along 
may be for shareholders to vote on the forthcoming resolution to shareholders, 
being: 
 
Special Resolution: 
 
 1. THAT the directors are directed and required to take all steps immediately 
    following the passing of this resolution to ensure that (a) the 
    arrangements in place between the Company and Alliance Trust Savings 
    Limited relating to share plans, savings schemes and/or related matters 
    (the "Schemes") in respect of the Company's share capital are amended as a 
    matter of urgency with the result that such arrangements no longer provide 
    for or entitle the registered shareholder under the Schemes to exercise any 
    votes on behalf of participants in the Schemes unless such participants 
    have given specific instructions to Alliance Trust Savings Limited (or the 
    relevant nominee) as to how the votes attached the relevant shares should 
    be cast in respect of a particular resolution; and (b) to the extent not 
    already provided for by (a) of this resolution, the provisions in the share 
    savings scheme operated on the Company's behalf by Alliance Trust Savings 
    Limited be amended so that (i) they provide for the exercise of voting 
    rights only in accordance with the specific instructions of participants in 
    the scheme; and (ii) any scaling-up voting provisions contained therein are 
    abolished and of no further effect; and (c) the Company announces as soon 
    as the changes under (a) and (b) have been implemented. 
 
For further information please contact: 
 
Midas Investment Management Limited 
 
Tel: 0161 242 2895 
 
Sources: 
 
¹ Charter European Trust plc Annual Report 2010 
 
² AIC 31 May 2011 
 
³ RNS Announcement 6404R 5 May 2009 
 
³* Stakeholders' Momentum Investment Trust plc Half Yearly Report to 31 
December 2009 
 
³** Charter European Trust plc Net Asset Value Announcement 3 October 2011 
 
 
 
END 
 

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