TIDMMEQI
M&G EQUITY INVESTMENT TRUST P.L.C.
RECOMMENDED PROPOSALS
12 January 2011
The Board of M&G Equity Investment Trust P.L.C. (the "Company") hereby
announces recommended proposals for the reconstruction and winding-up of the
Company.
Under the Proposals:
* Zero Dividend Shareholders and Package Unitholders will be able to roll over
some or all of their investment by electing to receive Securities in one or
more of the Rollover Funds (namely M&G High Income Investment Trust P.L.C.,
M&G Corporate Bond Fund and M&G Global Dividend Fund), or to realise their
investment for cash payable to them in the liquidation of the Company;
* Capital Shareholders will be able to roll over any value attributable to
their Shares by electing to receive package units in M&G High Income, or to
realise any value attributable to their Shares for cash payable to them in
the liquidation of the Company;
* Income Shareholders will, given their nominal potential capital
entitlements, receive any entitlements in the liquidation of the Company as
cash payments.
Securities in the Rollover Funds shall be issued at the Rollover Price of the
relevant Rollover Fund, which shall be calculated by reference to the net asset
value of the relevant Rollover Fund.
Rolling into the Rollover Funds should not, under current UK law and practice,
crystallise a gain or loss for UK capital gains tax purposes for UK resident
Capital Shareholders, Zero Dividend Shareholders and Package Unitholders.
A circular dated 12 January 2011 providing details of the Proposals, and
convening general meetings at which the Resolutions required to implement them
will be proposed, will shortly be posted to Shareholders.
Further details of the proposals are set out below.
Enquiries:
Nathan Brown, Numis Securities: 020 7260 1426
Jonathan McClelland, Secretary: 020 7548 3027
RECOMMENDED PROPOSALS FOR THE RECONSTRUCTION AND WINDING-UP OF THE COMPANY
Introduction to the Proposals
The Board of M&G Equity Investment Trust P.L.C. has today announced recommended
proposals for the reconstruction and winding-up of the Company.
The Company was launched as a closed-ended investment trust on 8 March 1996 with
a planned winding-up date of 8 March 2011. Under the Articles, the Directors are
obliged to convene an extraordinary general meeting on 8 March 2011, at which a
resolution to place the Company into voluntary liquidation must be proposed.
Liquidation without rollover options would result in all Shareholders and
Package Unitholders receiving cash for their investment and, depending on their
individual circumstances, incurring a potential liability to capital gains tax
or realising an allowable loss.
The Proposals have been designed to provide Capital Shareholders, Zero Dividend
Shareholders and Package Unitholders with a choice of realising their investment
or continuing it through one or more of the Options listed below.
In respect of Income Shares, given their nominal potential capital entitlements,
any entitlements due to Income Shareholders in the liquidation of the Company
shall be met automatically as cash payments.
Considerations for ISA investors and managers
Please note that the Securities in the Rollover Funds are qualifying investments
for the purposes of continued holdings within an ISA. ISA investors must consult
their ISA manager as to whether the rules of their particular ISA will allow
them to hold Securities.
Persons who hold an interest in Shares or Package Units through an M&G ISA
should read the additional documentation sent to them together with the
Circular.
The Proposals
Under the Proposals the Company will, for operational reasons, be wound up on 4
March 2011 rather than the planned winding-up date of 8 March 2011 as stated in
the Articles. Zero Dividend Shareholders will (on the assumption that there are
sufficient assets in the Company) receive the amount that they should have
received were the Company to be wound up on 8 March 2011. Other Shareholders and
Package Unitholders will have their entitlements calculated on the Calculation
Date, but it is not anticipated that this will materially affect their
entitlements relative to a winding-up on the planned date.
Capital Shareholders, Zero Dividend Shareholders and Package Unitholders will
have a choice between continuing their investment by electing for one or more of
the rollover options listed below and/or realising some or all of their
investment for cash under the Cash Option.
The Options for Capital Shareholders, Zero Dividend Shareholders and Package
Unitholders are as follows:
For Package Unitholders * the Package Unit Option - to receive M&G HIT
Package Units; and/or
* the M&G Corporate Bond Fund Option - to
receive M&G Corporate Bond Fund Shares;
and/or
* the M&G Global Dividend Fund Option - to
receive M&G Global Dividend Fund Shares;
and/or
* the Cash Option - to receive cash in the
liquidation of the Company.
For Capital Shareholders * the Package Unit Option - to receive M&G HIT
Package Units; and/or
* the Cash Option - to receive cash in the
liquidation of the Company.
For Zero Dividend Shareholders * the Package Unit Option - to receive M&G HIT
Package Units; and/or
* the M&G Corporate Bond Fund Option - to
receive M&G Corporate Bond Fund Shares;
and/or
* the M&G Global Dividend Fund Option - to
receive M&G Global Dividend Fund Shares;
and/or
* the Cash Option - to receive cash in the
liquidation of the Company.
Given the nominal capital entitlements in respect of Income Shares, Income
Shareholders will not be entitled to make Elections under the Proposals and will
be deemed to have elected for the Cash Option under the Scheme.
Advantages of the Proposals
The Directors believe that the Proposals are in the best interests of
Shareholders and Package Unitholders taken as a whole because they offer:
* greater choice and flexibility than if the Company were simply wound up,
since the Proposals enable Capital Shareholders, Zero Dividend Shareholders
and Package Unitholders to roll their investment, (in a tax efficient
manner, under current UK law and practice for UK resident Shareholders and
Package Unitholders ), into one or more of the Rollover Funds in addition to
being able to realise their investment for cash under the Cash Option;
* the opportunity to elect for M&G HIT Package Units, enabling Capital
Shareholders, Zero Dividend Shareholders and Package Unitholders to maintain
their exposure to UK equities within a listed closed-ended investment trust
under the management of M&G following a similar investment strategy to that
of the Company; and
* the potential to avoid certain dealing and other costs associated with a
share purchase in the secondary market.
The choice between the various Options available under the Proposals will be a
matter for each Capital Shareholder, Zero Dividend Shareholder and Package
Unitholder to decide and will be influenced by their individual financial and
tax circumstances and investment objectives. Capital Shareholders, Zero Dividend
Shareholders and Package Unitholders should accordingly, before making an
Election, read carefully the information on the Options in the Circular, as well
as the Prospectus published in relation to M&G High Income and, in addition,
Zero Dividend Shareholders and Package Unitholders should, before making an
Election, read carefully the Key Features Document published in relation to the
M&G Corporate Bond Fund and the M&G Global Dividend Fund (including, in
particular, the risk factors set out in those documents).
Shareholders who are in any doubt as to the contents of this document or as to
the action to be taken should immediately seek their own personal financial
advice from an appropriately qualified independent adviser authorised pursuant
to the Financial Services and Markets Act 2000.
Default Provisions
Zero Dividend Shareholders and/or Package Unitholders who do not make valid
Elections for the purposes of the Proposals will be deemed to have elected for
the Package Unit Option, unless unavailable in the event that the conditions to
M&G High Income's participation in the Scheme are not satisfied (see the section
headed "M&G High Income shareholder approval" below), in which case Elections
made by Zero Dividend Shareholders and/or Package Unitholders (including deemed
Elections) for the Package Unit Option will be deemed to be Elections for the
M&G Corporate Bond Fund Option.
Capital Shareholders who do not make valid Elections for the purposes of the
Proposals will be deemed to have elected for the Cash Option. In the event that
the conditions to M&G High Income's participation in the Scheme are not
satisfied, Elections made by Capital Shareholders (including deemed Elections)
for the Package Unit Option will be deemed to be Elections for the Cash Option.
The Rollover Funds
Under the Proposals, Capital Shareholders, Zero Dividend Shareholders and
Package Unitholders have the choice of electing for Securities in one or more of
the Rollover Funds. Information on each of these Rollover Funds is summarised
below and detailed in the Circular. In addition, full details of M&G High Income
are set out in the published Prospectus and details of the M&G Corporate Bond
Fund and the M&G Global Dividend Fund are set out in the published Key Features
Document.
M&G High Income
M&G High Income, a UK investment trust managed by Nick Evans (also the fund
manager with primary responsibility for the day-to-day management of the
Company's portfolio), invests primarily in UK equities quoted on the London
Stock Exchange, with the aim of achieving an above average and increasing income
over the 20 year life of the company (with a planned winding-up date of 17 March
2017) while at the same time seeking to achieve capital growth. In March 2011,
Richard Hughes, Nick Evans' predecessor as fund manager of both the Company and
M&G High Income, will resume primary responsibility for the day to day
management of M&G High Income's portfolio.
M&G Corporate Bond Fund
The M&G Corporate Bond Fund, managed by Richard Woolnough, aims to achieve a
higher total return (the combination of income and growth of capital) from
investment than would be obtainable in UK government fixed interest securities
(i.e. gilts) of similar maturities.
The M&G Corporate Bond Fund invests mainly in sterling denominated corporate
debt instruments. The fund's exposure to corporate debt may be gained by the use
of derivatives. Any currency exposures within the M&G Corporate Bond Fund may be
managed by currency hedges into sterling.
The M&G Corporate Bond Fund may also invest in other assets including collective
investment schemes, other transferable securities and other debt instruments
(including corporate debt and government and public securities denominated in
any currency), cash and near cash, deposits, warrants, money market instruments
and other derivative instruments.
M&G Global Dividend Fund
The M&G Global Dividend Fund, aims to deliver a dividend yield above the market
average, by investing mainly in a range of global equities. The Fund aims to
grow distributions over the long term whilst also maximising total return (the
combination of income and growth of capital).
The fund's exposure to global equities may be gained through the use of
derivatives. The Fund may invest across a wide range of geographies, sectors and
market capitalisations. The Fund may also invest in other assets including
collective investment schemes, other transferable securities, cash and near
cash, deposits, warrants, money market instruments and derivatives.
Costs and expenses
General
The Company has limited its exposure to the costs in relation to the Proposals
by entering into the following arrangements with M&G Securities.
The Proposals have been structured such that Shareholders and Package
Unitholders will bear a fixed cost in relation to the Proposals (the "Standard
Adjustment"), with further costs (the "Rollover Adjustment") being borne only
by those Capital Shareholders, Zero Dividend Shareholders and Package
Unitholders who elect (or are deemed to elect) for Securities in one or more of
the Rollover Funds.
A Standard Adjustment of GBP325,000 shall be deducted from the Net Assets of the
Company in calculating Shareholders' and Package Unitholders' entitlements under
the Scheme to reflect a reasonable estimate of the costs which the Company would
need to incur in any event in relation to its liquidation.
In addition, each Capital Share, Zero Dividend Share and Package Unit in respect
of which an Election has been made (or is deemed to be made) to receive
Securities in one of the Rollover Funds pursuant to the Scheme, shall bear a
Rollover Adjustment when calculating their entitlement under the Scheme. The
Rollover Adjustment shall be 1 per cent. of the Cash Terminal Asset Value for
each Package Unit, Capital Share and Zero Dividend Share in respect of which an
Election has been made (or is deemed to be made) to receive Securities in one of
the Rollover Funds pursuant to the Scheme less the Rollover Adjustment Deduction
being an amount by which the Rollover Adjustment can be reduced in the event
that the Scheme Costs are less than what would otherwise be the sum of the
Standard Adjustment and the Rollover Adjustment.
The Company will pay an amount equal to the Adjustments to M&G Securities in
consideration for which M&G Securities has agreed to meet the Company's costs in
relation to the Proposals. In the event that the Scheme is not implemented only
the Standard Adjustment will be paid to M&G Securities and any additional costs
of the Company in relation to the Proposals shall be borne by M&G Securities.
Contribution by M&G Securities
As noted above, M&G Securities has agreed to meet the Company's costs in
relation to the Proposals, in consideration for which the Company will pay the
Adjustments to M&G Securities. In addition M&G Securities has agreed to meet M&G
High Income's costs in relation to the Scheme (other than the stamp duty and
SDRT to be borne by M&G High Income in respect of the transfer of assets to M&G
High Income pursuant to the Scheme).
Management and administration agreements
The Company has given notice for the termination of:
* the existing agreement for investment management services ("Investment
Management Services Agreement") between the Company and M&G; and
* the existing agreement for administration services ("Administration
Services Agreement") between the Company and M&GFS,
such notices to take effect on the Effective Date and M&G and M&GFS have each
waived their right to receive any termination payment in relation to the
termination of the Investment Management Services Agreement and the
Administration Services Agreement respectively.
Entitlements under the Scheme
In calculating Shareholders' and Package Unitholders' entitlements under the
Scheme:
(i) each Capital Share, Zero Dividend Share and Package Unit in respect
of which an Election has been made (or is deemed to have been made) to receive
Securities in one of the Rollover Funds pursuant to the Scheme will be valued at
its Rollover Terminal Asset Value and Securities in the Rollover Funds shall be
issued at the Rollover Price of the relevant Rollover Fund, which shall be
calculated by reference to the net asset value of the relevant Rollover Fund;
(ii) each Capital Share, Zero Dividend Share and Package Unit in respect
of which an Election has been made (or is deemed to have been made) for the Cash
Option, will be valued at its Cash Terminal Asset Value; and
(iii) each Income Share will be valued at its Cash Terminal Asset Value.
Since the Rollover Adjustment is being applied to Shares and Package Units in
respect of which Elections are made (or are deemed to be made) to receive
Securities in Rollover Funds pursuant to the Scheme (see the section headed
"General" above), the Rollover Terminal Asset Value will be less than the Cash
Terminal Asset Value.
Please note, as described further below, it is possible depending on market
movements until the Calculation Date that the Final Terminal Asset Value could
be less than the final entitlement per Zero Dividend Share, in which case
Capital Shareholders and Income Shareholders would not receive any payments
under the Scheme.
Each Package Unit will be valued as the sum of the relevant Final Terminal Asset
Value of one Zero Dividend Share (in respect of the Zero Dividend Share
contained within it), the relevant Final Terminal Asset Value of one Income
Share (in respect of the Income Shares contained within it) and the relevant
Final Terminal Asset Value of one Capital Share (in respect of the Capital
Shares contained within it).
Capital Shareholders and Income Shareholders should note that, due to the value
of the Net Assets and the entitlements of the Share classes, had the Company
been wound up at 12 noon on 6 January 2011 the Capital Shares and Income Shares
would have had no entitlement to cash or Securities under the Scheme.
Shareholders and Package Unitholders considering electing to roll over into M&G
High Income should note that the market price of the M&G HIT Package Units may
generally represent a discount to their net asset value and that the level of
discount may vary. By way of example, on 6 January 2011, the level of discount
was 8.46 per cent. and for the period between 1 January 2010 and 6 January 2011
the discount has ranged from 0.48 per cent. to 10.42 per cent. Accordingly,
Shareholders and Package Unitholders electing for the Package Unit Option may
not subsequently be able to realise their investment in M&G HIT Package Units at
the net asset value of their M&G HIT Package Units at the time of disposal.
Dividends
The Directors currently intend to pay the Second Interim Dividend on or about
11 February 2011 to Income Shareholders and Package Unitholders on the Register
on 4 February 2011.
Furthermore, under the Proposals, the Directors will declare a Third Interim
Dividend equal to their best estimate of the revenue profits of the Company
(including accumulated revenue reserves) available for distribution. The Third
Interim Dividend is expected to be paid on or about 2 March 2011 to Income
Shareholders and Package Unitholders on the Register on 21 February 2011. The
Directors currently intend, based on estimates as at 12 noon on 6 January 2011
and subject to market conditions, that the Second Interim Dividend and the Third
Interim Dividend together total 1.30 pence per Income Share (or 1.30 pence per
Package Unit).
If a Second Interim Dividend and Third Interim Dividend totalling 1.30 pence per
Income Share (or 1.30 pence per Package Unit) were paid, the total dividend paid
by the Company in respect of the eight month financial period ending 4 March
2011, including the Second Interim Dividend and the Third Interim Dividend would
be 3.30 pence per Income Share (3.30 pence per Package Unit), which would
compare with the total dividend of 6.0 pence per Income Share (6.0 pence per
Package Unit), which was paid by the Company in respect of the year ended 30
June 2010.
Any balance remaining in the Company's revenue reserve after the Third Interim
Dividend has been paid will be taken into account when calculating the Final
Terminal Asset Value of the Shares. Where the Final Terminal Asset Value is less
than the final entitlement per Zero Dividend Share provided for under the
Articles, any amount of undistributed revenue profits of the Company will be
attributed to the Zero Dividend Shareholders.
M&G High Income shareholder approval
In order to satisfy Elections for the Package Unit Option, it is necessary for
M&G High Income to put an enabling resolution to its shareholders. The necessary
meeting has been convened for 23 February 2011.
M&G High Income's participation in the Scheme is conditional, inter alia, on the
passing of the M&G High Income Resolution. In the event that the conditions to
M&G High Income's participation in the Scheme are not satisfied, all Elections
by Zero Dividend Shareholders and Package Unitholders (including deemed
Elections) for the Package Unit Option will be deemed to be Elections for the
M&G Corporate Bond Fund Option and all Elections by Capital Shareholders for the
Package Unit Option will be deemed to be Elections for the Cash Option.
Liquidation Fund
Under the Proposals, before transferring the assets of the Company to the
Rollover Funds, the Liquidators will set aside sufficient assets in the
Liquidation Fund:
(i) to cover an amount equal to the Adjustments which it shall pay to M&G
Securities to be applied by them to settle or defray such costs as more
particularly described in the section headed "Costs and Expenses" above,
including the Company's costs in relation to the Proposals; and
(ii) to meet its known actual and contingent liabilities (excluding
those covered by (i) above but including those described in the section headed
"Potential recovery of VAT" below).
The Liquidators will also provide in the Liquidation Fund for a Retention which
they consider sufficient to meet any unascertained and unknown liabilities of
the Company. The Retention is currently expected to amount to approximately
GBP100,000.
Whilst assets comprising the Liquidation Fund are expected to mostly comprise
cash and near cash, the Liquidators have agreed to take into account in respect
of the Retention the dividends from underlying investments which have been
quoted ex-dividend, but which the Company has not received as at the Effective
Date subject to M&G providing an indemnity to the Liquidators in respect of such
dividends. Any balance in the Liquidation Fund, after settlement of all
creditors and after settlement of the entitlements of Shareholders and Package
Unitholders in accordance with the Scheme, will be paid by the Liquidators in
one or more cash distributions to Shareholders and Package Unitholders on the
Register as at the Effective Date in accordance with their rights under the
Articles and provided that no payments of less than GBP5.00 shall be made to any
Shareholder or Package Unitholder. Any such residual amounts shall be paid to
Help for Heroes, a charity with Registered Charity Number 1120920, formed to
help those who have been wounded in Great Britain's current conflicts. All such
distributions shall be paid by cheque only. The decision as to when to finalise
the liquidation shall be at the entire discretion of the Liquidators.
Potential recovery of VAT
The Company has issued proceedings against HMRC whereby the Company has
submitted a claim regarding the recovery by investment trusts of VAT previously
paid on management fees. Any such amounts (net of any costs of such recovery and
of any tax) will be distributed, in cash, by the Liquidators to Shareholders and
Package Unitholders in accordance with their rights under the Articles.
The pursuit of recovery of further amounts of VAT and interest may result in the
liquidation being kept open in the order of five years. It is anticipated that
the additional costs of doing so will be approximately GBP20,000 per annum
including liquidator costs, registrar's costs for maintaining the shareholder
register, custody charges and any potential tax compliance costs (plus any
applicable VAT thereon). In addition legal fees in relation to the VAT claim and
registrar's fees in relation to making the distributions at the end of the
liquidation are expected to be approximately GBP40,000 (plus any applicable VAT
thereon). The remaining outstanding VAT the Company is seeking to reclaim is in
the region of GBP2,300,000 together with any applicable interest that the court,
if it rules in favour of the Company, may award.
Shareholder meetings
Shareholders are being asked to vote on the Proposals because the Directors are
required to obtain the consent of the Shareholders to the Proposals pursuant to
the Articles.
At the General Meeting of the Income Shareholders, the Income Shareholders and
Package Unitholders, with respect to the Income Shares comprised in the Package
Unit, will be asked to vote on a Special Resolution to approve the passing of
the Special Resolution at the First EGM, the special resolution at the Second
EGM and any variation to the special rights attached to their Income Shares
resulting from the amendments to the Articles proposed pursuant to the
Proposals. Each Special Resolution will require the approval of 75 per cent. or
more of the votes cast at the relevant Meeting, whether in person or by proxy.
At the General Meeting of the Capital Shareholders, the Capital Shareholders and
Package Unitholders, with respect to the Capital Shares comprised in the
Package, will be asked to vote on a Special Resolution to approve the passing of
the Special Resolution at the First EGM, the special resolution at the Second
EGM and any variation to the special rights attached to their Capital Shares
resulting from the amendments to the Articles proposed pursuant to the
Proposals. Each Special Resolution will require the approval of 75 per cent. or
more of the votes cast at the relevant Meeting, whether in person or by proxy.
At the General Meeting of the Zero Dividend Shareholders, the Zero Dividend
Shareholders and Package Unitholders, with respect to the Zero Dividend Shares
comprised in the Package, will be asked to vote on a Special Resolution to
approve the passing of the Special Resolution at the First EGM, the special
resolution at the Second EGM and any variation to the special rights attached to
their Zero Dividend Shares resulting from the amendments to the Articles
proposed pursuant to the Proposals. Each Special Resolution will require the
approval of 75 per cent. or more of the votes cast at the relevant Meeting,
whether in person or by proxy.
At the First EGM, at which the Shareholders and Package Unitholders are entitled
to vote, a Special Resolution will be proposed to: (i) reclassify the Shares in
accordance with the Elections (made or deemed to be made) and to amend the
Articles of the Company for the purposes of implementing the Scheme; and (ii)
sanction the Scheme and authorise its implementation by the Liquidators. The
Special Resolution will require the approval of 75 per cent. or more of the
votes cast at the Meeting, whether in person or by proxy.
At the Second EGM, at which Shareholders and Package Unitholders are entitled to
vote, a Special Resolution will be proposed to approve the winding-up of the
Company on the Effective Date, appoint the Liquidators and confer the
appropriate powers on them. The Special Resolution will require the approval of
75 per cent. or more of the votes cast at the Meeting, whether in person or by
proxy.
If any of the Special Resolutions to be proposed at the General Meetings or the
Special Resolutions to be proposed at the First EGM or the Second EGM are not
passed, an Ordinary Resolution will be proposed at the Third EGM, at which all
Shareholders and Package Unitholders are entitled to vote, to wind up the
Company voluntarily. At the Third EGM, Shareholders entitled to vote and who
vote in favour of the winding-up resolution shall collectively have such total
number of votes on a poll, as is one more than the number of votes which are
required to be cast on such a poll for the said resolution to be carried. The
Liquidators shall seek to realise the assets of the Company as soon as
reasonably possible and, after paying all creditors, will make one or more cash
distributions to shareholders on the Register on 8 March 2011.
Further details of the Proposals and the Scheme pursuant to which Shareholders
will receive their entitlements under the Proposals are set out in the Circular.
Conditions to the Proposals
The Scheme which provides for, and which will effect, the Options, is
conditional inter alia upon:
* the passing by the Shareholders of all Resolutions to be proposed at the
General Meetings, at the First EGM and at the Second EGM (or at any
adjournments thereof);
* the UK Listing Authority consenting to the amendment to the Official List to
reflect the reclassification of the Shares as Reclassified Shares; and
* the Directors not resolving to abandon the Scheme.
If any of the Special Resolutions to be proposed at the General Meetings or the
Special Resolution to be proposed at the First EGM or the Special Resolution to
be proposed at the Second EGM are not passed, an Ordinary Resolution will be
proposed at the Third EGM to wind up the Company voluntarily.
Taxation
As explained more fully in the Circular, the receipt of Securities under the
Proposals should not, on the basis of current UK legislation and HMRC practice,
trigger a disposal of Shares for the purposes of UK capital gains tax where
these are held as an investment. A subsequent sale, redemption or other disposal
of the Securities acquired will, however, constitute a disposal for capital
gains tax purposes and may, depending on a Shareholder's particular
circumstances, give rise to a liability to capital gains tax.
Shareholders who are UK resident individuals benefit from an annual exemption,
which for the 2010/ 2011 tax year exempts the first GBP10,100 of any gains from
charge to capital gains tax. Shareholders are advised to read carefully the
section headed "Taxation" in the Circular and to consult an independent
professional adviser immediately if they are in any doubt as to your
circumstances.
Action to be taken
Details of the action to be taken by Shareholders and Package Unitholders in
relation to the Proposals are set out in the Circular. It is important that
Shareholders and Package Unitholders read Part II of the Circular carefully and
return their Forms of Proxy (for certificated holders) or CREST Proxies (for
uncertificated holders) as soon as possible and in any case no later than 48
hours before the appointed time for the relevant Meeting.
In addition, Capital Shareholders, Zero Dividend Shareholders and Package
Unitholders with certificated holdings wishing to return their Forms of Election
should do so for receipt no later than 4.30 p.m. on 21 February 2011.
Shareholders with uncertificated holdings intending to make CREST Elections must
similarly do so not later than 4.30 p.m. on 21 February 2011. Failure to make a
valid Election will result in the relevant Zero Dividend Shareholder or Package
Unitholder (other than Restricted Persons), as the case may be, being deemed to
have elected for the Package Unit Option or if the Package Unit Option is not
available in the event that the conditions to M&G High Income's participation in
the scheme are not satisfied (see the section headed "M&G High Income
shareholder approval" above), in which case Elections (including deemed
Elections) for the Package Unit Option will be deemed to be Elections for the
M&G Corporate Bond Fund Option. Failure by Capital Shareholders (other than
Restricted Persons) to make a valid Election will result in the relevant Capital
Shareholder being deemed to have elected for the Cash Option.
Restricted Persons
Restricted Persons will not be entitled to make Elections under the Proposals
and will therefore not receive a Form of Election or be entitled to submit a
valid CREST Election. Restricted Persons will be deemed to have elected for the
Cash Option under the Scheme and will (unless the Directors determine otherwise)
receive cash in accordance with the Scheme directly from the Company in respect
of their entire holding of Shares or Package Units unless they have satisfied
the Directors that it is lawful for the Rollover Funds to issue Securities to
them under any relevant overseas laws and regulations.
Expected Timetable
+-------------------------------------+----------------------------------------+
|Friday 4 February 2011 |5.00 p.m. Record date for entitlements|
| |to the Second Interim Dividend; |
| | |
+-------------------------------------+----------------------------------------+
|Friday 11 February 2011 |Expected payment date for Second Interim|
| |Dividend; |
| | |
+-------------------------------------+----------------------------------------+
|Wednesday 16 February 2011 |Date from which it is advised that|
| |dealings in Shares should only be for|
| |cash settlement and immediate delivery|
| |of documents of title; |
| | |
+-------------------------------------+----------------------------------------+
|Thursday 17 February 2011 |Expected declaration of the Third|
| |Interim Dividend; |
| | |
+-------------------------------------+----------------------------------------+
|Monday 21 February 2011 |4.30 p.m. Latest time and date for|
| |receipt of Forms of Election and CREST|
| |Elections from Capital Shareholders,|
| |Zero Dividend Shareholders and Package|
| |Unitholders; |
| |6.00 p.m. Record Date for entitlements|
| |of Shareholders and Package Unitholders|
| |under the Proposals; |
| |6.00 p.m. Record date for entitlements|
| |to the Third Interim Dividend expected|
| |to be paid on or about 2 March 2011; |
| |6.00 p.m. The Company's Register closes;|
| | |
+-------------------------------------+----------------------------------------+
|Tuesday 22 February 2011 |11.00 a.m. Latest time and date for|
| |receipt of Forms of Proxy and CREST|
| |Proxies for the General Meeting of the|
| |Income Shareholders; |
| |11.05 a.m. Latest time and date for|
| |receipt of Forms of Proxy and CREST|
| |Proxies for the General Meeting of|
| |Capital Shareholders; |
| |11.10 a.m. Latest time and date for|
| |receipt of Forms of Proxy and CREST|
| |Proxies for the General Meeting of Zero|
| |Dividend Shareholders; |
| |11.15 a.m. Latest time and date for|
| |receipt of Forms of Proxy and CREST|
| |Proxies for the First EGM; |
| | |
+-------------------------------------+----------------------------------------+
|Thursday 24 February 2011 |11.00 a.m. General Meeting of Income|
| |Shareholders; |
| |11.05 a.m.(1) General Meeting of Capital|
| |Shareholders; |
| |11.10 a.m.(1) General Meeting of Zero|
| |Dividend Shareholders; |
| |11.15 a.m.(1) First EGM; |
| | |
+-------------------------------------+----------------------------------------+
|Wednesday 2 March 2011 |Expected payment date for Third Interim|
| |Dividend; |
| |10.00 a.m. Latest time and date for|
| |receipt of Forms of Proxy and CREST|
| |Proxies for Second EGM; |
| |12.00 noon Calculation Date; |
| |12.00 noon Calculation of the issue|
| |price of Securities in M&G High Income|
| |to be issued pursuant to the Scheme; |
| | |
+-------------------------------------+----------------------------------------+
|Thursday 3 March 2011 |8.00 a.m. Opening of the Company's|
| |register of Shareholders and dealings in|
| |Reclassified Shares on the London Stock|
| |Exchange expected to commence; |
| | |
+-------------------------------------+----------------------------------------+
|Friday 4 March 2011 |Effective Date for the implementation of|
| |the Proposals; |
| |7.30 a.m. Dealings in Reclassified|
| |Shares suspended; |
| |10.00 a.m. |
| |Second EGM |
| |Company placed into liquidation; |
| |12.00 noon |
| |Calculation of the issue price for M&G|
| |Corporate Bond Fund Shares and the M&G|
| |Global Dividend Fund Shares; |
| |Issue of the M&G Corporate Bond Fund|
| |Shares and the M&G Global Dividend Fund|
| |Shares; |
| | |
+-------------------------------------+----------------------------------------+
|Sunday 6 March 2011 |10.00 a.m. Latest time and date for|
| |receipt of Forms of Proxy and CREST|
| |Proxies for the Third EGM; |
| | |
+-------------------------------------+----------------------------------------+
|Monday 7 March 2011 |Confirmation letters despatched for|
| |Securities issued in uncertificated form|
| |in respect of the M&G Corporate Bond|
| |Fund Option and the M&G Global Dividend|
| |Fund Option; |
| | |
+-------------------------------------+----------------------------------------+
|Tuesday 8 March 2011 (or as soon as|CREST accounts credited with cash in|
|practicable thereafter) |respect of the Cash Option; |
| |Cheques despatched in respect of the|
| |Cash Option; |
| | |
+-------------------------------------+----------------------------------------+
|Tuesday 8 March 2011. |10.00 a.m. Third EGM; |
| |Securities in M&G High Income issued|
| |pursuant to the Scheme; |
| |Securities issued in uncertificated form|
| |credited to the stock accounts in CREST|
| |of the persons entitled thereto in|
| |respect of the Package Unit Option; |
| | |
+-------------------------------------+----------------------------------------+
|Monday 14 March 2011 (or as soon as|Certificates despatched for Securities|
|practicable thereafter) |issued in certificated form in respect|
| |of the Package Unit Option; |
| | |
+-------------------------------------+----------------------------------------+
|By Friday 2 March 2012 |Listing on the London Stock Exchange of|
| |Reclassified Shares cancelled. |
| | |
+-------------------------------------+----------------------------------------+
Note (1): or as soon thereafter as the immediately preceding meeting shall have
concluded or been adjourned.
Notes
The information in this announcement should be read in conjunction with the full
text of the Circular. Capitalised terms used in this announcement shall, unless
the context otherwise requires, bear the meaning given to them in the Circular.
Copies of the Circular have been submitted to the National Storage Mechanism and
will shortly be available for inspection at www.hemscott.com/nsm.do.
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: M&G Equity Investment Trust PLC via Thomson Reuters ONE
[HUG#1479269]
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