TIDMMATE
RNS Number : 6814A
JPMorgan Multi-Asset Grwth & Income
24 January 2024
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT ARE NOT
FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY,
IN WHOLE OR IN PART, IN, INTO OR FROM THE UNITED STATES OF AMERICA
(INCLUDING ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED
STATES AND THE DISTRICT OF COLUMBIA), AUSTRALIA, CANADA, JAPAN, NEW
ZEALAND, THE REPUBLIC OF SOUTH AFRICA, ANY MEMBER STATE OF THE EEA
OR ANY OTHER JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL.
This announcement is not an offer to sell, or a solicitation of
an offer to acquire, securities in the United States or in any
other jurisdiction in which the same would be unlawful. Neither
this announcement nor any part of it shall form the basis of or be
relied on in connection with or act as an inducement to enter into
any contract or commitment whatsoever.
24 January 2024
JPMorgan Multi-Asset Growth & Income plc
Legal Entity Identifier: 549300C0UCY8X2QXW762
Proposed combination with JPMorgan Global Growth & Income
plc
Introduction
The Board of JPMorgan Multi-Asset Growth & Income plc (the
"Company" or "MATE") is pleased to announce that it has signed
Heads of Terms with the Board of JPMorgan Global Growth &
Income plc ("JGGI") in respect of a proposed combination of the
Company and JGGI to be effected by way of a section 110 scheme of
reconstruction of MATE (the "Scheme") and issuance of new ordinary
shares of JGGI as consideration for the transfer of all of MATE's
assets (together with the Scheme, the "Transaction").
MATE shareholders will receive new shares in JGGI which will
provide them with exposure to a diversified portfolio of global
equities managed by JPMorgan Funds Limited ("JPMorgan") and a
company with a strong performance record and a well-established
dividend policy.
The Board recognises that the size of the Company limits its
appeal to investors. As a consequence, the Board intends to
unanimously recommend the Transaction to MATE shareholders, as it
believes that the Transaction provides the most attractive option
for MATE's shareholders, in particular taking into account the
strong performance, improved share rating, significantly greater
economies of scale and secondary market liquidity that will result
from a shareholding in JGGI.
Summary of the Scheme
The Transaction will be effected by way of a scheme of
reconstruction of the Company under section 110 of the Insolvency
Act 1986, resulting in the Company's voluntary liquidation and the
transfer of all of the Company's assets to JGGI in exchange for the
issue of new ordinary shares of JGGI ("New JGGI Shares") to
existing MATE shareholders ("MATE Shareholders"). The number of New
JGGI Shares issued to MATE Shareholders will be determined on a
Formula Asset Value ("FAV") for FAV basis. The FAVs will be
calculated based on the net asset value of each of the Company and
JGGI on an agreed calculation date.
In accordance with customary practice for such transactions
involving investment trusts, the City Code on Takeovers and Mergers
is not expected to apply to the Transaction. The Transaction will,
amongst other things, be subject to the approval by the
shareholders of each of JGGI and MATE, in addition to necessary
regulatory and tax approvals.
JPMorgan Global Growth & Income
The investment objective of JGGI is to achieve superior total
returns from world stock markets. The investment manager aims to
achieve this through investing in a diversified portfolio of
approximately 50-90 world stocks in which it has a high degree of
conviction, in order to achieve superior total returns and
outperform the MSCI All Countries World Index (in sterling terms)
over the long-term. JGGI's investment objective and policy will not
change in connection with the Transaction. Following the successful
completion of the Transaction, the enlarged JGGI will continue to
be managed by JPMorgan, with Helge Skibeli, James Cook and Tim
Woodhouse as portfolio managers.
Benefits of the Scheme
The Board of Directors of MATE believes that the Scheme has a
strong rationale, which includes the following benefits for MATE
Shareholders:
-- Strong historic investment performance: Over the year ended
31 December 2023, the NAV total return of JGGI's Ordinary shares
was 19.5 per cent. compared to that of MATE's Ordinary shares of
11.1 per cent. Over the five years ended 31 December 2023, the NAV
total return of JGGI's Ordinary shares was 112.8 per cent. compared
to 73.9 per cent. for the MSCI AC World Index (Sterling).
-- Improved share rating: JGGI's Ordinary share price currently
trades at a premium to NAV and has averaged a 1.2 per cent. premium
over the 12 months to 31 December 2023 compared to MATE's 3.3 per
cent. average discount over the same period.
-- Scale: The enlarged JGGI is expected to have net assets in
excess of GBP2.1 billion(1) , solidifying its position as the
largest investment trust in the AIC Global Equity Income sector
whilst delivering an attractive dividend yield and total return.
The scale of the enlarged JGGI should improve secondary market
liquidity for MATE Shareholders and result in cost
efficiencies.
-- Dividends : JGGI's dividend policy is to make quarterly
distributions with the intention to pay dividends totalling at
least 4 per cent. of its NAV as at the end of the preceding
financial year.
-- Contribution to costs: As described below, JPMorgan has
agreed to pay all the direct corporate costs incurred by the
Company in connection with the Transaction.
-- Reduced management fee for MATE Shareholders: Following the
completion of the Transaction, MATE Shareholders will benefit from
significantly lower management fees as part of the enlarged JGGI.
The incremental management fee payable by the enlarged JGGI will be
0.30 per cent. per annum (the management fee is tiered with 0.55
per cent. per annum on JGGI's net assets up to GBP750 million, 0.40
per cent. per annum between GBP750 million and GBP1.5 billion and
0.30 per cent. per annum thereafter), resulting in an expected
weighted average management fee of 0.42 per cent. per annum on
enlarged JGGI net assets.
-- Lower ongoing charges: MATE Shareholders in the enlarged JGGI
are expected to benefit from an ongoing expense ratio of 0.5 per
cent., considerably lower than the Company's ongoing expense ratio
of 1.1 per cent. for the last financial year.
-- Portfolio : Exposure to a diversified portfolio of global
companies managed by JPMorgan. Currently there is approximately 50
per cent. overlap between the holdings in the MATE and JGGI
portfolios.
-- Track record of consolidating investment trusts: JGGI has an
established track record of combining investment trusts. It
completed the merger with The Scottish Investment Trust in August
2022 and JPMorgan Elect in December 2022.
Costs of the Transaction
JPMorgan has agreed a contribution in relation to all the direct
corporate costs incurred by the Company in respect of the
Transaction. Accordingly, these direct costs will not be borne by
MATE Shareholders. Details of the cost contribution are set out in
more detail below.
Any costs of realignment or realisation of the MATE portfolio
prior to the Scheme becoming effective will be borne by the
Company.
Any stamp duty, stamp duty reserve tax or other transaction tax,
or investment costs incurred by JGGI for the acquisition of the
MATE portfolio or the deployment of the cash therein upon receipt
shall be borne by the enlarged JGGI, including the London Stock
Exchange admission fees.
JPMorgan Cost Contribution
JPMorgan has proposed a contribution equal to the direct
corporate costs of the Transaction incurred by both MATE and JGGI
("Cost Contribution"). The Cost Contribution will be provided by
means of a fee waiver of JPMorgan's management fee on the enlarged
JGGI's NAV following completion of the Scheme. However, the Cost
Contribution will be for the benefit of the shareholders of each of
MATE and JGGI by means of an adjustment against the direct
corporate costs in their respective FAVs.
The aggregate net asset value of the assets to be transferred
under the Scheme is currently estimated to be approximately GBP71
million(1) .
Expected timetable and General Meetings
It is intended that the documentation in connection with the
Transaction will be posted to MATE Shareholders at the end of
February 2024. The Company will need to hold two general meetings
to obtain necessary shareholder approvals for the Transaction. It
is intended these general meetings will be convened in March
2024.
The latest date for the Scheme to be determined to be
unconditional is 31 March 2024, unless extended by mutual agreement
of the Company and JGGI.
The Chair of MATE, Sarah MacAulay, commented:
"Your Board has been conscious for some time that MATE's
relatively small size reduced its appeal to investors, while
prospects for the Company's growth have been limited by difficult
market conditions. Unfortunately, size does matter due to the
implications for costs and for the liquidity of MATE's shares. The
Board believes that the proposed combination with JPMorgan Global
Growth & Income plc offers shareholders exposure to a large,
liquid company with significantly lower costs and a
well-established dividend policy. Furthermore, it offers a degree
of continuity, given that approximately 50 per cent. of MATE is
currently managed by the same investment team that has an excellent
performance record from investing in a globally diversified
portfolio."
Notes:
1. Based on the published net asset values of JGGI and MATE as at 18 January 2024.
For further information please contact:
JPMorgan Multi-Asset Growth & Income Contact via Company Secretary
Sarah MacAulay
JPMorgan Funds Limited
Simon Crinage +44 (0) 20 7742 4000
JPMorgan Funds Limited (Company Secretary) +44 (0) 20 7742 4000
Panmure Gordon (UK) Limited
Sapna Shah +44 (0) 20 7886 2783
Alex Collins +44 (0) 20 7886 2767
Ashwin Kohli +44 (0) 20 7886 2786
Important Information
This announcement contains information that is inside
information for the purposes of Article 7 of the UK version of
Regulation (EU) No. 596/2014 which is part of UK law by virtue of
the European Union (Withdrawal) Act 2018, as amended (the UK Market
Abuse Regulation). The person responsible for arranging for the
release of this announcement on behalf of JPMorgan Multi-Asset
Growth & Income plc is Paul Winship of JPMorgan Funds
Limited.
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