Foresight 2 VCT Plc Foresight 2 Vct Plc : Recommended Proposals For A Merger
13 Novembro 2015 - 12:00PM
UK Regulatory
TIDMFTN
JOINT ANNOUNCEMENT
13 November 2015
FORESIGHT VCT PLC ("F1")
FORESIGHT 2 VCT PLC ("F2")
(together the "Companies" and each a "Company")
TIDM: FTV and FTN
RECOMMENDED PROPOSALS FOR A MERGER BETWEEN F1 AND F2 TO BE COMPLETED BY
WAY OF A SCHEME OF RECONSTRUCTION UNDER SECTION 110 OF THE INSOLVENCY
ACT 1986 AND THE TRANSFER BY F2 OF ITS ASSETS AND LIABILITIES TO F1 IN
EXCHANGE FOR THE ISSUE OF NEW SHARES IN F1
SUMMARY
Further to the announcement made on 15 October 2015, the boards of the
Companies (the "Boards") are pleased to announce that they have reached
agreement on recommended proposals for the merger of the Companies (the
"Merger"), to create a single enlarged VCT with net assets of
approximately GBP117 million (the "Enlarged Company"). The Companies are
each managed by Foresight Group CI Limited ("Foresight").
The Merger is conditional upon certain conditions being satisfied as
further set out in the circulars being posted to the Companies'
respective shareholders today (the "Circulars"). F1 has also today
published a prospectus in connection with the Merger (the "Prospectus").
The Merger will be effected by F2 being placed into members' voluntary
liquidation pursuant to a scheme of reconstruction under section 110 of
the Insolvency Act 1986 (the "Scheme"). The assets and liabilities of
F2 will then be transferred to F1 in exchange for the issue of new F1
shares to existing F2 shareholders. As both Companies have three
equivalent share classes (ordinary shares, planned exit shares and
infrastructure shares), each existing share class in F2 will effectively
be merged into the corresponding share class in F1 on a relative net
asset basis.
The approval of resolutions in connection with these proposals will be
proposed at a general meeting of F1 to be held on 10 December 2015 and
general meetings of F2 to be held on 10 December 2015 and 18 December
2015. Further details of the proposals are set out below.
BACKGROUND
In September 2004, regulations were introduced allowing VCTs to be
acquired by, or merge with, each other without prejudicing the VCT tax
reliefs obtained by their shareholders. A number of VCTs have taken
advantage of these regulations to create larger VCTs for economic and
administrative efficiencies. One advantage of a larger VCT is that it is
able to spread the fixed elements of its running costs across a larger
asset base and as a result reduce running costs.
Taking the above into account, the Boards entered into discussions to
consider a merger of the Companies into one enlarged VCT. The aim of
the Merger is to attain strategic benefits and reductions in the annual
running costs per share for all shareholders, while ensuring that the
planned exit strategy of the planned exit share portfolios and
infrastructure share portfolios in each Company can continue.
THE SCHEME
Firstly, pursuant to a scheme of reconstruction under section 110 of the
Insolvency Act 1986, F2 will be placed into members' voluntary
liquidation. Secondly, all of the assets and liability of F2 will be
transferred to F1 in consideration for the issue of new shares in F1
directly to the shareholders of F2. Thirdly, F2 shall be wound up.
Implementation of the Merger will require resolutions being approved by
each Company's shareholders.
Whilst there will only be one general meeting of F1, at which
shareholders will be invited to consider and vote in favour of the
Merger and authorise the issue of new shares pursuant to the Merger,
there will be two general meetings for F2. At F2's first general meeting,
the shareholders will be invited to approve the Merger and authorise the
liquidators to implement the Scheme and at the second general meeting,
the shareholders will be invited to pass a special resolution to wind up
F2 and cancel the listing of the F2 shares.
If a shareholder in F2 does not vote in favour of the Merger and
expresses his dissent in writing then he may require the liquidators to
purchase his shares at their break-value price (this being an estimate
of the amount he would receive in an ordinary winding up of F2 if all of
the assets had to be realised). The break-even is expected to be
significantly below the net asset value of F2.
In addition to the approval of shareholders being sought at the general
meetings, the Scheme is conditional upon:
-- notice of dissent not being received from shareholders of F2 who hold
more than 10% in nominal value of the issued share capital of F1;
-- F1 confirming to F2 and F2 confirming to F1 that, in each case, it has
not received any notice of any claims, proceedings or actions of whatever
nature threatened or commenced, as relevant, against F1 which the F2
Board regard as material or against F1 which the F2 Board regard as
material; and
-- the Companies maintaining their VCT status.
Subject to the above, the Scheme shall proceed and become effective
immediately after the passing of the special resolution for the winding
up of F2 to be proposed at the F2 second general meeting and will be
binding on all F2 shareholders, including dissenting F2 shareholders,
and all persons claiming through or under them.
If the conditions have not been fulfilled by 31 January 2016, the Scheme
will not proceed.
BENEFITS ANTICIPATED FROM THE MERGER
In recommending that the Companies participate in the Merger, which will
result in an Enlarged Company with a net asset base of approximately
GBP117 million, the Boards expect to bring a number of benefits to the
shareholder of each Company as follows:
-- there will be a reduction in the forecast combined annual running costs
and costs per share for all shareholders;
-- the Merger will preserve existing VCT tax reliefs which will carry over
and attach to the post-Merger holdings for shareholders,
and in respect of the enlarged ordinary shares fund, shareholders will
benefit from:
-- an enlarged ordinary share fund with a significantly wider spread of
investments;
-- a larger fund with greater flexibility to sustain a programme of new
investments;
-- a larger capital base which will facilitate liquidity management and
enhance prospects for the maintenance of regular dividend payments to
ordinary shareholders;
-- a larger capital base allowing the Enlarged Company to sustain a
programme of share buybacks; and
-- based on the above, the Enlarged Company is expected to be more
attractive to potential investors and enjoy an enhanced ability to
achieve future capital raisings.
THE ENLARGED COMPANY BOARD
The Boards have considered the size and composition of the Enlarged
Company board and it has been agreed that, subject to completion of the
Merger, Jocelin Harris, the current chairman of F2, will be appointed as
a director to the Enlarged Company board.
MERGER ILLUSTATION
In terms of the proposed number of consideration shares to be issued if
the Merger proceeds, this will be calculated based on a relative net
assets basis, by reference to the formulas contained in the Circulars.
Had the Merger been completed on the basis of the Scheme examples set
out in the Circulars (which are based on the unaudited net assets of the
Companies as at 30 June 2015), the number of Consideration Shares which
would be issued for each existing F2 share would be as follows:
Percentage of share capital of each class in the Enlarged
Consideration Shares to be issued per F2 Share Company held by F2 Shareholders
F2 Ordinary Shares 0.6290 F1 Ordinary Shares 32.9%
F2 Planned Exit Shares 0.9602 F1 Planned Exit Shares 49.2%
F2 Infrastructure Shares 0.9908 F1 Infrastructure Shares 49.8%
EXPECTED TIMETABLE
Expected Timetable for F1
Latest time for the receipt of forms of proxy for 10.00 a.m. on 8 December
the General Meeting for F1 2015
General meeting 10.00 a.m. on 10 December
2015
Calculation Date 17 December 2015
Effective Date for the transfer of the assets and 18 December 2015
liabilities of F2 to the Company and the issue of
Consideration Shares pursuant to the Scheme
Announcement of the results of the General Meeting 18 December 2015
and completion of the Scheme
Admission and dealings in the Consideration Shares 21 December 2015
to commence
CREST accounts credited (where applicable) 22 December 2015
Certificates for consideration shares dispatched by 22 January 2016
Expected Timetable for F2
Date from which it is advised that dealings in F2 8 December 2015
Shares should only be for cash settlement and immediate
delivery of documents of title
Latest time for receipt of forms of proxy for the 10.30 a.m. on 8 December
F2 First General Meeting 2015
F2 First General Meeting 10.30 a.m. on 10 December
2015
Latest time for receipt of forms of proxy for the 10.00 a.m. on 16 December
(MORE TO FOLLOW) Dow Jones Newswires
November 13, 2015 09:00 ET (14:00 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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