Merger proposals
September 29 2011 - 6:15AM
UK Regulatory
TIDMATI2
JOINT ANNOUNCEMENT
VICTORY VCT PLC
AMATI VCT 2 PLC
29 SEPTEMBER 2011
RECOMMENDED PROPOSALS FOR A MERGER BETWEEN VICTORY VCT PLC ("VICTORY") AND
AMATI VCT 2 PLC ("AMATI VCT 2") TO BE EFFECTED BY PLACING AMATI VCT 2 INTO
MEMBERS' VOLUNTARY LIQUIDATION PURSUANT TO SECTION 110 OF THE INSOLVENCY ACT
1986 AND THE TRANSFER BY AMATI VCT 2 OF ALL OF ITS ASSETS AND LIABILITIES TO
VICTORY IN CONSIDERATION FOR NEW SHARES OF 5 PENCE EACH IN VICTORY ("VICTORY
SHARES") AND THE CANCELLATION OF THE LISTING OF THE ORDINARY SHARES OF 10 PENCE
EACH IN AMATI VCT 2 ("AMATI VCT 2 SHARES") AND OTHER RECOMMENDED PROPOSALS IN
RELATION TO VICTORY, INCLUDING SHARE OFFERS TO RAISE UP TO GBP30 MILLION, ENHANCE
D SHARE BUY BACK AND REINVESTMENT FACILITY, A SHARE RECONSTRUCTION, A CHANGE TO
THE INVESTMENT POLICY AND A DIVIDEND REINVESTMENT SCHEME.
SUMMARY
The boards of ViCTory and Amati VCT 2 announced on 7 July 2011 that that they
were in discussions with a view to a possible merger of the two companies.
These discussions have now concluded and both boards are writing to their
respective shareholders with proposals for consideration for the proposed
merger (the "Scheme") and other proposals relating to ViCTory. The boards of
ViCTory and Amati VCT 2 consider that the interests of each company's
shareholders will be better served by the merger which will result in a single
company with a larger asset base, with increased cost efficiencies and an
improved spread of risk, with the ability to raise further funds whilst
sustaining share buy back demand.
Regulations in force since 2004 have permitted VCTs to merge without
shareholders losing their VCT tax relief.
The Scheme will be effected by Amati VCT 2 being placed into members' voluntary
liquidation pursuant to a scheme of reconstruction under Section 110 of the
Insolvency Act 1986. All of the assets and liabilities of Amati VCT 2 will be
transferred to ViCTory in exchange for New ViCTory Shares (which will be issued
directly to the shareholders of Amati VCT 2). The merger will be completed on a
relative net asset basis.
The effective date for the transfer of the assets and liabilities of Amati VCT
2 and the issue of New ViCTory Shares pursuant to the Scheme is expected to be
8 November 2011 (the "Effective Date"), following which the listing of the
Amati VCT 2 Shares will be cancelled and Amati VCT 2 will be wound up.
The Scheme is conditional, inter alia, on the approval of certain resolutions
to be proposed to shareholders of ViCTory and Amati VCT 2 at general meetings
to be held on 31 October 2011 for ViCTory ("ViCTory GM") and Amati VCT 2 ("
Amati VCT 2 GM 1"), and 8 November 2011 for Amati VCT 2 only ("Amati VCT 2 GM 2
") and dissent not having been expressed by shareholders of Amati VCT 2 holding
more than 5 per cent. of the issued Amati VCT 2 Shares.
In addition to the Scheme, the board of ViCTory is proposing to undertake Share
Offers to raise up to GBP30 million and to introduce an Enhanced Share Buy Back
and Reinvestment Facility for ViCTory Shareholders (and Amati VCT 2
Shareholders after they have received their New ViCTory Shares on the Scheme
taking effect) who wish to use the proceeds from selling Shares in ViCTory in
order to apply for Offer Shares under the Share Offers. The Share Offers are
conditional on the passing of certain of the resolutions to be proposed to
ViCTory Shareholders at the ViCTory GM.
The board of ViCTory is also proposing to undertake a Share Reconstruction and
to establish a Dividend Reinvestment Scheme, both of which are standalone
proposals.
The board of ViCToryalso considers it appropriate to renew share issue
authorities for ViCTory and to cancel both the share premium account and the
capital redemption reserve of ViCTory.
The board of Amati VCT 2 has previously declared a second interim dividend of
3.0p per Amati VCT 2 Share which, irrespective of the implementation of these
proposals, will be paid on 14 October 2011 to Amati VCT 2 Shareholders on the
register on 14 September 2011. The board of ViCTory has also declared an
interim dividend of 1.0p per ViCTory Share which, irrespective of the
implementation of these proposals, will be paid on 18 October 2011 to ViCTory
Shareholders on the register on 23 September 2011.
BACKGROUND
In September 2004, the Venture Capital Trusts (Winding-up and Mergers) (Tax)
Regulations 2004 were introduced, allowing venture capital trusts ("VCTs") to
be acquired by, or merge with, each other without prejudicing tax reliefs
obtained by their shareholders. A number of VCTs have now taken advantage of
these regulations to create larger VCTs where running costs can be spread over
a substantially greater asset base.
With the above in mind, the boards of ViCTory and Amati VCT 2 entered into
discussions to consider a merger of the companies to create a single larger VCT
and reduce the overall running costs. Following detailed consideration of the
portfolio and financial position of each company, both of which are managed by
Amati Global Investors Limited (the "Manager") and have broadly similar
investment policies, the boards of ViCTory and Amati VCT 2 have reached an
agreement to recommend that the companies be merged.
The main purpose of the proposed merger is to create a single larger VCT that
will bring a number of advantages to both sets of shareholders, namely:
* restoring efficiencies of scale through the creation of a single VCT of a
larger size with a greater capital base over which to spread
administration, regulatory and management costs (including the significant
fixed costs of maintaining the listing of a VCT on the Official List);
* extending the potential life of both VCTs through the enlarged VCT,
allowing investors to benefit from the mature portfolio of qualifying
investments which has been built up over many years and which, following
the restructuring undertaken by the Manager, will be focused on businesses
which the Manager believes have strong prospects even against a difficult
economic backdrop;
* facilitating the possibility of raising new funds, and hence also being
able to sustain a share buy back policy for investors who wish to exit; and
* ViCTory and the Manager agreeing that (if the Scheme takes effect) the
annual running costs will be capped at 3.5 per cent. of the Enlarged
Company's net assets, any excess being met by the Manager by way of a
reduction in future management fees.
Shareholders should note that the merger will be outside the provisions of the
City Code on Takeovers and Mergers.
The board of ViCTory believes that the proposed Share Offers are attractive
because:
* investors will gain access to an attractive and mature portfolio of
Qualifying Investments, which is diversified by a spread of Non-Qualifying
Investments encompassing a range of global investment themes;
* the Enlarged Company's top 20 investments (as at 31 August 2011) would
represent over 48 per cent. of the combined net asset value. These
investments would have a weighted average market capitalisation of GBP154
million, and be in companies which, in the Manager's view, have good
prospects for earnings growth, and robust financial positions. If the two
portfolios were combined as at 31 August 2011 the top ten holdings would
have been Lo-Q (4.0 per cent.), Brooks Macdonald (3.1 per cent.), Synergy
Health (2.8 per cent.), Green Compliance (2.7 per cent.), Anglo Pacific
(2.7 per cent.), Tikit (2.7 per cent.), Prezzo (2.6 per cent.), Idox (2.6
per cent.), Asian Citrus (2.5 per cent.) and Cupid (2.4 per cent.);
* the Manager is an award winning small cap team, and has recognised
expertise in managing AIM VCTs, with the most recent share offer from Amati
VCT plc having been awarded the highest rating (87 out of 100) amongst VCT
share offers in the last tax year from Martin Churchill's independent
publication, Tax Efficient Review;
* the Directors and Manager believe AIM remains an attractive source of
financing for innovative and high-quality companies, and that compelling
Qualifying Investment opportunities will continue to arise in this market.
The board of ViCTory is proposing to allocate up to GBP2 million of New Shares
which may be issued pursuant to the Share Offers for the Dividend Reinvestment
Scheme, further details of which are provided below.
The proposed Share Offers enable the board of ViCTory to offer the Enhanced
Share Buy Back and Reinvestment Facility, which allows participating
Shareholders to sell their Shares to ViCTory at a one per cent. discount to the
most recently published NAV per ViCTory Share, prior to the allotment if the
selling Shareholder applies the net proceeds to subscribe for Offer Shares
under the Share Offers. The board of ViCTory believes that the Enhanced Share
Buy Back and Reinvestment Facility is attractive because it increases the
likelihood of establishing a significant pool of Shareholders committed to
another five years of investment, thus increasing the longevity of the Enlarged
Company.
The Share Offers effectively mark a re-launch of ViCTory, and to reflect this
the board of ViCTory is proposing a Share Reconstruction in order to re-base
the Net Asset Value of ViCTory to approximately 100p per Share. The board
believes this will make it easier for Shareholders to monitor progress of
ViCTory from this point on. It is proposed that the Share Reconstruction be
implemented irrespective of whether the Scheme proceeds or not.
Conditional upon the Scheme becoming effective, the board of ViCTory proposes
that the name of ViCTory be changed to "Amati VCT 2 plc".
The board of ViCTory is proposing the Dividend Reinvestment Scheme to enable
Shareholders to use all of their dividends to subscribe for further New Shares
in a cost effective manner. The price at which New Shares will be issued
pursuant to the prospectus is the NAV per New Share as close as reasonably
practical to the dividend payment date. Dividend Reinvestment enables
Shareholders to increase their total holding in ViCTory without incurring
dealing costs, issue costs or stamp duty (ViCTory bears all of the costs of
operating the Scheme). Subject to the limits on investments in VCTs, New Shares
issued under the Dividend Re-investment Scheme should qualify for the VCT tax
reliefs that are applicable to subscriptions for new VCT shares.
EXPECTED TIMETABLES
MERGER
EXPECTED TIMETABLE FOR VICTORY
(Dates subject to variation if any General Meeting is adjourned)
Latest time for receipt of forms of proxy 2.00 pm on 29 October 2011
for the General Meeting
General Meeting 2.00 pm on 31 October 2011
Calculation Date after 5.00 pm on 7 November 2011
Effective Date for the transfer of the 8 November 2011
assets and liabilities of Amati VCT 2 to
ViCTory and the issue of Consideration
Shares to Amati VCT 2 Shareholders
Announcement of the results of the Scheme 8 November 2011
Admission of and dealings in the New Shares 9 November 2011
(in respect of the Scheme) to commence
CREST accounts credited with the New Shares 9 November 2011
(in respect of the Scheme)
Effective date of the Share Reconstruction after close of business on 9
November 2011
Amendment to the listing of the Shares 10 November 2011
arising
from the Share Reconstruction
CREST accounts credited with the New Shares 10 November 2011
(in respect of the Share Reconstruction)
Certificates for the New Shares dispatched 16 November 2011
EXPECTED TIMETABLE FOR AMATI VCT 2
(Dates subject to variation if any General Meeting is adjourned)
Date from which it is advised that dealings 29 October 2011
in Amati VCT 2 Shares should only be for
cash settlement and immediate delivery of
documents of title
Latest time for receipt of forms of proxy 2.30 pm on 29 October 2011
for the Amati VCT 2 First General Meeting
Amati VCT 2 First General Meeting 2.30 pm on 31 October 2011
Latest time for receipt of forms of proxy 2.30 pm on 6 November 2011
for the Amati VCT 2 Second General
Record Date for Amati VCT 2 Shareholders' 7 November 2011
entitlements under the Scheme
Amati VCT 2 Register of Members closed 7 November 2011
Calculation Date after 5.00 pm on 7 November 2011
Dealings in Amati VCT 2 Shares suspended 7:30 am on 8 November 2011
Amati VCT 2 Second General Meeting 2.30 pm on 8 November 2011
Effective Date for the transfer of the 8 November 2011
assets and liabilities of Amati VCT 2 to
ViCTory
Announcement of the results of the Scheme 8 November 2011
Cancellation of the Amati VCT 2 Shares' 8.00 am on 9 November 2011
listing
THE SHARE OFFERS
EXPECTED TIMETABLE FOR VICTORY
(The Share Offers may close earlier than the dates stated below if they are
fully subscribed by an earlier date. The allotment of Offer Shares is at the
Directors' discretion and is expected to be made monthly, although there may be
additional allotments (at the Manager's discretion).)
2011/2012 Offer opens 29 September 2011
Closing date for 2011/12 Offer 5.00 pm on Thursday 5 April 2012
2012/2013 Offer opens 6 April 2012
Closing date for applications under the 5.00 pm on 5 September 2012
Enhanced Share Buy Back and Reinvestment
Facility
Closing date for 2012/13 Offer unless 5.00 pm on 10 September 2012
extended by the Directors (but not beyond
27 September 2012)
Allotments of Offer Shares monthly (or at other times at the
Manager's discretion)
Dealings in Offer Shares commence second Business Day following
allotment
CREST accounts credited within five Business Days of
allotment
Certificates for the Offer Shares within ten Business Days of
dispatched allotment
BACKGROUND TO AMATI VCT 2 AND VICTORY
ViCTory and Amati VCT 2 are both managed by Amati Global Investors Limited, an
independent fund management business ultimately owned by its staff.
ViCTory was established as a venture capital trust with the name Singer &
Friedlander AIM 3 VCT plc in January 2001 and was subsequently merged with two
other venture capital trusts managed by Singer & Friedlander Investment
Management Limited - Singer & Friedlander AIM VCT plc and Singer & Friedlander
AIM 2 VCT plc - in 2006. ViCTory was renamed ViCTory VCT plc on 16 June 2009
and the Manager was appointed as investment manager on 22 March 2010. At this
date, ViCTory had net assets of approximately GBP18 million. From this date up to
31 August 2011, the unaudited NAV Total Return of ViCTory has increased by 4.2
per cent., during which time the FTSE AIM All Share Total Return Index has
risen by 3.7 per cent. ViCTory invests mainly in a portfolio of companies whose
shares are traded on AIM, with its remaining assets invested in a portfolio of
small and mid cap companies listed on the London Stock Exchange's main market,
unquoted holdings and bank deposits. As at 22 September 2011, ViCTory's
unaudited NAV was 41.78p per Share. Since launch, ViCTory has paid a total of
12.75p per share in dividends (including the interim dividend to be paid on 18
October 2011).
Amati VCT 2 (previously called Invesco Perpetual AIM VCT plc) is a venture
capital trust launched in 2004 with the intention of investing in
VCT-qualifying companies traded on AIM. On 11 February 2011 the Manager was
appointed as investment manager to Amati VCT 2. From this date to 22 September
2011, the unaudited NAV Total Return of Amati VCT 2 has fallen by 5.6 per
cent., during which time the FTSE AIM All Share Total Return Index has fallen
by 23.7 per cent.. Since taking on this mandate the Manager has restructured
the portfolio with the same approach that was adopted for ViCTory. To
illustrate this new approach, the unaudited weighted average market
capitalisation of the equity investments in Amati VCT 2's portfolio rose from GBP
50 million on 11 February 2011 to GBP153 million on 31 August 2011. At that date,
eight of the newly introduced Non-Qualifying Investments purchased by Amati VCT
2 had also been purchased for ViCTory's portfolio. In addition to this, three
new Qualifying Investments have been made by both VCTs.
As at 22 September 2011 Amati VCT 2 had unaudited net assets of GBP11.6 million
and its unaudited NAV per share was 26.76p. The investment portfolio as at the
date of this document comprises 6 quoted, 46 AIM traded and 4 unquoted
holdings. Amati VCT 2 has paid dividends totalling 30p per Share since its
launch (including the second interim dividend to be paid on 14 October 2011).
The investment policy of Amati VCT 2 is broadly similar to that of ViCTory and,
accordingly, the proposed acquisition of the assets of Amati VCT 2 is
consistent with ViCTory's investment policy.
Having re-structured the portfolios of both VCTs, the Manager now believes that
both Amati VCT 2 and ViCTory are in a position to benefit from the mature
portfolio of qualifying businesses which have been established over a number of
years. The most successful of these investments have become substantial
holdings in both VCTs as they have performed strongly, and the manager believes
that these core holdings in the portfolios look well placed to continue to do
so over the coming years, even against a difficult economic backdrop.
Amati Global Investors (formerly Noble Fund Managers Limited) is an independent
fund management business, and is a wholly owned subsidiary of Amati Global
Partners LLP, which was established by Paul Jourdan and Douglas Lawson to
effect the management buy-out of Noble Fund Managers Limited. Amati Global
Partners LLP is wholly owned by the staff of the Manager.
In addition to ViCTory and Amati VCT 2, the Manager manages Amati VCT, the CF
Amati UK Smaller Companies Fund and the Amati Systematic Trend Fund. From
launch on 24 March 2005 to 31 August 2011, Amati VCT has generated an unaudited
NAV Total Return of 3.6 per cent. (excluding subscription costs and tax rebate,
assuming dividends reinvested at the ex-dividend date), during which time the
FTSE AIM All Share Total Return Index has fallen by 26.6 per cent. This equates
to a 63.6 per cent. total return for investors who bought the fund at launch,
paying the full initial costs, and receiving the full available tax relief
(which was 40 per cent. in 2005), assuming that the 26.3p of dividends paid
were reinvested at the ex-dividend date.
Both boards have discussed the size and future composition of the ViCTory board
and it has been concluded that, subject to implementation of the Merger, James
Hambro and David Page will resign as directors and two of the existing
directors of the Amati VCT 2 Board, Julian Avery and Chris Macdonald, will be
appointed as directors of the Enlarged Company, with Julian Avery becoming
Chairman.
DOCUMENTS AND APPROVALS
Amati VCT 2 Shareholders will receive a copy of the ViCTory prospectus together
with a circular convening the Amati VCT 2 GM 1 on 31 October 2011 and the Amati
VCT 2 GM 2 on 8 November 2011, at which Amati VCT 2 Shareholders will be
invited to approve resolutions in connection with the Scheme.
ViCTory Shareholders will receive a copy of the ViCTory prospectus together
with a circular convening the ViCTory GM to be held on 31 October 2011, at
which ViCTory Shareholders will be invited to approve resolutions in connection
with the Scheme, the Share Offers, the Enhanced Share Buy Back and Reinvestment
Facility, the Dividend Reinvestment Scheme, the Share Reconstruction, a change
in investment policy, and to renew share issue authorities and to cancel both
ViCTory's share premium account and capital redemption reserve.
Copies of the prospectus and the circular for ViCTory, and a copy of the
circular for Amati VCT 2, have been submitted to the UK Listing Authority and
will be shortly available for download at the National Storage Mechanism
(www.hemscott.com/nsm.do).
Manager for ViCTory and Amati VCT 2
Amati Global Investors Limited
Paul Jourdan/Douglas Lawson
Telephone: 0131 243 0411
Sponsor to ViCTory
Howard Kennedy Corporate Services LLP
Keith Lassman
Telephone: 020 7636 1616
The directors of ViCToryaccept responsibility for the information relating to
ViCTory and its directors contained in this announcement. To the best of the
knowledge and belief of such directors (who have taken all reasonable care to
ensure that such is the case), the information relating to ViCTory and its
directors contained in this announcement, for which they are solely
responsible, is in accordance with the facts and does not omit anything likely
to affect the import of such information.
The directors of Amati VCT 2 accept responsibility for the information relating
to Amati VCT 2 and its directors contained in this announcement. To the best of
the knowledge and belief of such directors (who have taken all reasonable care
to ensure that such is the case), the information relating to Amati VCT 2 and
its directors contained in this document, for which they are solely
responsible, is in accordance with the facts and does not omit anything likely
to affect the import of such information.
Howard Kennedy Corporate Services LLP, which is authorised and regulated in the
United Kingdom by the Financial Services Authority, is acting as sponsor for
ViCTory and no-one else and will not be responsible to any other person for
providing the protections afforded to customers of Howard Kennedy Corporate
Services LLP (subject to the responsibilities and liabilities imposed by
Financial Services and Markets Act 2000 and the regulatory regime established
thereunder) or for providing advice in relation to any matters referred to
herein.
M:WDOX03203203200003H4607763.DOC
END
Amati Vct 2 (LSE:ATI2)
Historical Stock Chart
From May 2024 to Jun 2024
Amati Vct 2 (LSE:ATI2)
Historical Stock Chart
From Jun 2023 to Jun 2024